ECCLESIASTICAL INSURANCE made its submission to the High Court on Tuesday in a case brought by the Financial Conduct Authority (FCA) to determine whether insurers should compensate companies, including churches, that have lost money owing to coronavirus.

Ecclesiastical is one of eight insurance companies challenging the FCA’s contention that the pandemic and the Government’s reaction to it should be treated as one “indivisible peril”, a single cause of lost income. The insurers argue that the FCA has put fundamental legal principles aside in applying one set of facts to all the policy wordings, and that the events of the past few months have to be split into constituent parts, not all of which lead to payments.

Gavin Kealey QC, representing Ecclesiastical, submitted that the FCA was approaching the issues from the wrong end. “The FCA logic appears to be that, since there was no exclusion for epidemics/pandemics, therefore they were covered. It is a logic which implicitly invites the court to ignore the coverage language altogether and reach a conclusion simply based on the absence of the FCA’s preferred exclusion. It is a false logic and a wrong approach.”

The “short answer to the FCA’s case”, he submitted, was that Ecclesiastical did not agree to insure what had in fact occurred. The submission is long and detailed, running to 200 pages, and examines every word and meaning of the policy statements on business interruption.

Much revolves around whether the Prime Minister’s social-distancing guidance on 16 March was advisory or mandatory. The FCA says that these were “clear instructions”; Ecclesiastical submits that the regulations became statutory on 23 March when lockdown was announced and places of worship were instructed to close: “There is no basis for the FCA’s plea that a UK-wide emergency existed at a date before the UK government took emergency action in relation to the whole of the UK.”

The hearing was due to end yesterday. No date has yet been announced for when judgment will be given.