The Financial Conduct Authority has named the eight insurers who have agreed to take part in a test case to clarify business interruption insurance.

The FCA said earlier this month it would take legal action over business interruption (BI) insurance after concerns some insurers were failing to pay out or dragging their feet on Coronavirus-related business interruption insurance claims due to unclear policy wording.

There is no suggestion the eight firms who have agreed to take part in the test case are guilty of any mis-dealing but they will help clarify terms and conditions for BI insurance.

The firms are:

• Arch Insurance (UK) Limited
• Argenta Syndicate Management Limited
• Ecclesiastical Insurance Office plc
• Hiscox Insurance Company Limited
• MS Amlin Underwriting Limited
• QBE UK Ltd
• Royal & Sun Alliance Insurance plc
• Zurich Insurance plc

The regulator is instigating a number of test cases in the High Court to clarify the scope of BI cover and said the move was to resolve doubt for businesses facing “uncertainty” on their claims.

The FCA said: “We are seeking a judgment that will help policyholders and insurers have a much clearer view of which business interruption policies respond to the pandemic, and those that don’t. Therefore, the court may well decide a number of these policies respond to the pandemic and others do not.”

Since the FCA’s announcement that it was taking insurers to court it has approached 56 insurers and reviewed over 500 relevant policies from 40 insurers.

It says it has identified a sample of 17 policy wordings that capture the majority of the key issues that “could be in dispute.”

The watchdog expects to file claims around 9 June with insurers filing defences around 23 June. A 5 to 10 day court hearing is expected in the second half of July.

Christopher Woolard, Interim Chief Executive at the FCA said: “The court action we are taking is aimed at providing clarity and certainty for everyone involved in these BI disputes, policyholder and insurer alike.

“We feel it is also the quickest route to this clarity and by covering multiple policies and insurers, it will also be of most use across the market. The identification of a representative sample of policies and the agreement of insurers who underwrite them to participate in these proceedings is a major step forward in progressing the matter to court.”