Opinion: Once the dust settles on the FCA test case, who will feel the pain most keenly?

Insurers will be reeling from the FCA business interruption (BI) Supreme Court appeal ruling.

Beyond the immediate effects of having to pay out on claims that were hitherto not expected to be covered, and the reputational damage inflicted on the industry from the unedifying spectacle of insurers facing off with clients in court, insurance firms will be licking their wound for some time to come.

But policyholders look likely to be the main long-term losers, despite the short-term victory for many small businesses that were facing ruin without a BI payout.

Already we are hearing that wordings have been considerably tightened upon renewal of BI policies and premiums for these policies will no doubt skyrocket.

How easy will it be for a small business to get business interruption cover from now on? And then there are those businesses that did not claim, or were advised not to claim by their brokers - they must now be kicking themselves for not having done so in light of the test case ruling. 

But the blame game has only just begun.

Compliance advisory firm Mactavish has brokers in its sights, pointing the finger of blame at intermediaries for not advising their clients of pandemic risks and more recently accusing them of essentially being on the side of insurers as opposed to their business clients.

While this claim has been rubbished by others in the industry, now more than ever brokers must be seen to be serving the best interests of their clients. A broker boasting how successful it has been despite the lockdown does not make for good optics when so many of their clients have suffered.

Empathy must be the order of the day.