The United Kingdom Supreme Court in the FCA Test Case appeal dealt with the meaning of “prevention of access” in respect of the prevention of access due to the actions or advice of the local authority because of an emergency which is likely to endanger life or property in a Business Interruption policy.

The relevant non- damage Public Authority clauses did not cover all business interruption due to “restrictions imposed” by public authority following an occurrence of a notifiable disease.  They applied where interruption is caused by the policyholder’s “prevention of access” to the business premises due to such restrictions.

The appeal court agreed with the lower court that prevention means stopping something from happening or making an intended act impossible and is different from mere hindrance.

“Prevention of access” may include the prevention of access to a discrete part of the premises or to the whole or part of the premises for the purpose of carrying on a discrete part of the policyholder’s business activities.

Where insurers only intend to insure a complete prevention of access, the policy wording is easily refined or an appropriate definition can be added to the policy.