Most regulators around the world are staying far away from the question of whether business interruption insurance covers the consequences of the Coronavirus outbreak. Most say that this question can only be answered by the wording of each policy contract and the UK's Financial Conduct Authority used to say the same, but is now intervening.

The FCA is trying to help insurers and policyholders (i.e. the wealth managers and other firms that it regulates) gain a clearer knowledge of the coverage that differently-worded policies afford them by participating in a test case in the High Court to determine whether certain standard policy clauses, used by many UK insurers, cover interruptions in business caused by the global epidemic. The case involves 17 different types of wording and the court is expected to hear it in the second half of July.

While this is in progress, the regulator has issued some 'finalised guidance' which has just come into effect. It sets out the FCA's expectations for insurers and insurance intermediaries when handling claims and complaints for business interruption policies.

In this document, the phrase 'test case' appears 80 times. It states that by 15 July, the insurer in question should individually contact each policyholder whose claim or complaint for business interruption losses relates to the coronavirus pandemic under relevant non-damage business interruption policies is outstanding or has already been declined (or has had an adjustment or deduction for general causation) and tell it:

• whether its claim or complaint might be affected and the implications of that (including the FCA’s expectations of the insurer in respect of such claims or complaints with regard to the 'guidance'), or
• the reasons why its claim or complaint might not be affected and the implications of that.

Insurers should give all policyholders who have made "potentially affected claims or complaints" updates about the test case and its implications for them.