WhatsOnStage Logo
Home link

Landmark insurance ruling in the Supreme Court a 'massive boost' for theatres forced to close

Many organisations will benefit from today's Court ruling

The press pack outside the Supreme Court – back in the days before social distancing
© Steve Nimmons, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons

The theatre industry has much cause for celebration this evening as the Supreme Court in London dismissed an appeal made by insurers over pay-outs due to business interruption.

The case has been rumbling on for a while, triggered when a variety of insurance companies stated that their business interruption schemes did not cover eventualities such as the Covid pandemic.

A legal battle has raged over the ensuing months between these companies and a variety of watchdogs and campaign groups arguing that this was a deliberate misreading of rules.

After beginning in the High Court, the case rose through a series of appeals to the Supreme Court in London. The Supreme Court was essentially tasked with deciphering business interruption insurance policies relating to disease clauses, and whether or not insurers were justified in withholding payments due to Covid.

The decision in favour of the lobbying groups will have a massive impact. By favouring policyholder and regulator parties, the Court has essentially upheld a decision that means an estimated £1.8bn in coronavirus claims related to the first lockdown (including business interruption schemes) will now be paid to businesses.


Over 300,000 businesses with outstanding claims, many of whom are theatres or arts organisations, will therefore be paid by their insurers after being forced to close due to the pandemic. It's basically a great day for an assortment of venues and producers that have faced financial turbulence since the events last March.

The case was first brought to the courts by the Financial Conduct Authority alongside a plethora of campaign groups, who initiated a test case last autumn. Richard Leedham, partner at Mishcon de Reya (who represent one such group) said: "The judgment should be a massive boost to all businesses reeling from a third lockdown who can now demand their claims are paid."

The law firm Reed Smith described this as "a catastrophic outcome" for insurers – and may lead to alterations of insurance policies going forward, which might stymie the ability for organisations to be comprehensively covered in the future.

One judge in the Supreme Court was said to be damning of the insurance companies for their reluctance to pay out. Castigating them he said: "Covid-19 [when it appeared] fell squarely within the types of disease for which all the relevant disease and hybrid clauses provided cover."

The Financial Conduct Authority will be providing a set of guidelines for those who might be affected by the new rules

Sign up for our daily newsletter for more

Loading...
Loading...
Loading...