QBE says it may appeal a UK High Court finding in the COVID-19 business interruption (BI) test case.

The court passed its judgment overnight in the case which was undertaken by the UK Financial Conduct Authority (FCA) to resolve legal issues around some policy wordings and whether they respond to coronavirus shutdowns.

QBE – along with Arch, Argenta Syndicate Management, Ecclesiastical Insurance Office, Hiscox, MS Amlin, Royal & SunAlliance (RSA) and Zurich – agreed to take part.

The 160-page judgment is highly complex, but the FCA says it finds in its favour “on the majority of key issues”.

In a statement to the Australian Securities Exchange today, QBE says the court ruled in its favour on two out of three of QBE’s notifiable disease policy wordings examined, and in favour of insurers generally on denial of access policy wordings.

“However, the court ruled in favour of insureds with respect to one of QBE’s notifiable disease policy wordings and QBE is considering its options to appeal that decision,” the statement said.

QBE says that reinsurance will limit the net cost of its UK business interruption claims to $US70 million ($95.73 million).

“The FCA test case decision is highly complex and will take time for the industry to fully consider and for claims to be resolved,” it says.

“All parties involved now have an opportunity to apply to the court for permission to appeal some or all of the ruling with a decision on any such application expected to be made in October.”

Zurich says the decision confirms that its wordings examined in the case do not provide cover for business interruption in relation to the COVID-19 outbreak.

“While we welcome the judgment of the High Court in respect of Zurich’s wordings, we recognise that COVID-19 has caused immense suffering for our customers, their families and their businesses,” Group CEO Mario Greco said.

“We will continue to do all we can to support our customers and our communities at this time.”

Ecclesiastical says the judgment states “losses arising from the Covid-19 pandemic are not covered by Ecclesiastical’s business interruption policies and therefore we are not required to pay claims on those policies”.

RSA says some of its interpretations were upheld by the court, and some were not.

It estimates the additional financial impact at about £85 million ($149.67 million) after applying catastrophe reinsurance.

Hiscox says the judgment “comprises more than 160 pages of legal analysis by the court addressing important points of insurance law for the industry and customers”.

“The judgment clarifies that fewer than one third of Hiscox’s 34,000 UK business interruption policies may respond,” it says.