Today's High Court judgement in the test case brought by the Financial Conduct Authority in respect of business interruption losses following Covid -19 may bring clarity and hold potential relief for some but it may hold wider implications for the construction industry.
For development projects the implications of the decision need careful consideration - it may be limited to business interruption but for Construction All Risks (CAR) insurance where delay in start-up (DSU) cover, the indication in the judgement that the cause of the damage can now be considered is a change with uncertain impact.
Does this extend the previously understood more restricted meaning of 'damage' more widely ? If so, in effect this could arguably include all risks of damage during construction unless excluded ?
However there are possible advantages - for example it may assist in applying aggregation wording in CAR insurance to permitting consideration of the cause of the damage to identify different occurrences of damage.
Time and the already booked Appeal will tell and meanwhile expect debate.
Small businesses have been thrown a lifeline after the High Court ruled some insurers should have paid out for losses caused by lockdown.