The insurance test case appeal was heard at Supreme Court. The Middlesex Guildhall on Parliament Square is the home of the Supreme Court in the UK. Image by Tom Morris CC BY-SA.

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The court case was brought by the Financial Conduct Authority (FCA) against eight insurers who claimed only the most specialist ‘business interruption’ insurance policies had cover for such unprecedented restrictions. The Supreme Court on January 15 found mostly in favour of small firms receiving payments.

Freya Simms, chief executive of trade association LAPADA, said: “This is very welcome news for the art market that is largely made up of small businesses. At LAPADA, we were very grateful to our insurance brokers Besso who ensured many claims were paid out in the first instance. I hope that the other insurance companies act swiftly to settle claims in these particularly challenging times.”

However, some have concerns about the longer term impact of the decision. Dealer Alexander ‘Sandy’ Rich at Tregeagle Fine Art previously worked in the insurance sector.

He said: “Although I now run a small business myself and have been hugely impacted by the Covid lockdowns I don’t, necessarily, see the situation as being one to which there is an insurance solution.


“I totally get how one might expect a ‘Cancellation and Abandonment’ policy to respond to the cancellation (or curtailment) of an event like an art fair. However, I’m less certain about whether the ‘Consequential Loss’ or Business Interruption’ sections of a commercial combined policy (such as those commonly taken by an antique shop or art gallery might have) should be looked to for compensation for a closure ‘under the order of any government or public or local authority’.

“My own feeling is that if the burden of financial loss is transferred from elsewhere to insurers this ruling may only be of brief benef it to those submitting claims.

“I am deeply concerned that as losses stack-up in all areas, the ramifications will be very grave. The financial sector is still just as interlinked as it was in 2007-08.”

Positive about future

Rich added: “On the brighter side I feel, on the whole, that much of the art and antiques world is well positioned to benefit from the new economy which will emerge once all this has ended (a new Roaring Twenties).

“As an industry we can make a very positive case for our sustainability. There have also been huge strides made by many of us with regards to ecommerce.”