The Supreme Court has delivered its judgment in the Financial Conduct Authority\u2019s (FCA)\u2019s business interruption insurance test case, with the court's ruling in the favour of small firms potentially forcing insurers to pay out \u00a31.2bn in CBI claims.\u00a0\r\n\r\nFollowing the judgement, thousands of policyholders will now have their claims for coronavirus-related business interruption losses paid out.\u00a0\r\n\r\nThe court's decision brings to a close the legal arguments imposed by 14 types of policies issued by six insurers, and a substantial number of similar policies in the wider markets.\r\n\r\nThe FCA first brought the case against the courts in a bid to \u201curgently clarify key issues of contractual uncertainty for as many policyholders and insurers as possible\u201d, initially selecting a representative sample of 21 policy types issued by eight insurance groups.\u00a0\r\n\r\nSheldon Mills, executive director for Consumers and Competition at the FCA, said: \u201cCoronavirus is causing substantial loss and distress to businesses and many are under immense financial strain to stay afloat. This test case involved complex legal issues.\u00a0\r\n\r\n\u201cOur aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible, and today\u2019s judgment decisively removes many of the roadblocks to claims by policyholders.\u201d\r\n\r\nHe added: \u201cWe will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible.\u00a0\r\n\r\n\u201cInsurers should also communicate directly and quickly with policyholders who have made claims affected by the judgment to explain next steps.\u201d\r\n\r\nHuw Evans, ABI director general, told Catering Today: \u201cInsurers have supported this fast-track legal process every step of the way and we welcome the clarity that the judgment will bring to a number of complex issues. Today\u2019s judgment represents the final step in the appeal process.\r\n\r\n\u201cThe insurance industry expects to pay out over \u00a31.8bn in Covid-19 related claims across a range of products, including business interruption policies. Customers who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim.\u201d\r\n\r\nHe added: \u201cAll valid claims will be settled as soon as possible and in many cases the process of settling claims has begun. Some payments have already been made where valid business interruption claims have not been impacted by the test case ruling."