COVID-19 BI claims
Insurers will no doubt be relieved to know that 2026 should enable them to fully understand their exposure to COVID-19 BI claims. The limitation period for claims arising out of the first lockdown is due to expire in March 2026 where the majority of losses will arise. A number of Claimant law firms wrote to the FCA before Christmas requesting an extension of the deadline to file claims but there has been no comment on that as yet and it is difficult to see how such an extension could be unilaterally granted by the FCA. COVID-19 BI litigation remains ongoing and insurers will be keeping a close eye on the Supreme Court's consideration of furlough in the Gatwick Investments case due to be heard in February 2026.
Outside of COVID-19 BI, the impact of the Building Safety Act 2022 continues to be felt and an increase in claims utilising the extended limitation period can be expected. A recent claim issued by Lendlease against Balfour Beatty Plc in the TCC may be of interest given that a) the development in question was built over 20 years ago; and b) the claim seeks a Building Liability Order against a parent company to recover the losses.
Consumer sector
In the consumer sector, insurers can expect greater scrutiny from the FCA following the “super-complaint” issued by Which? in the latter part of 2025 in relation to the handling of home and travel claims. This is likely to filter its way down to the Financial Ombudsman Service (now with a new compensation limit of £445,000) with the potential for even more policyholder friendly awards.
Fraudulent property insurance claims continue to rise with associated issues over the fair presentation of risk likely to be prevalent amongst UK property books. The Court of Appeal's decision last year in Lonham Group v Scotbeef highlighted the critical importance of properly characterising insurance terms as warranties or representations which in turn impacts the correct application of the Insurance Act 2015. Insurers may wish to consider specific policy terms as well as questions on proposal forms and statements of fact to ensure they are able to utilise the provisions of the Act in the event.
