(Bloomberg) -- Insurers face the prospect of further payouts after a London court ruled in favor of policyholders on most issues in a dispute over Covid-19 claims.

Hiscox Ltd., RSA Insurance Group Plc, Zurich Insurance Group AG and five other companies were named in the case, which was brought by the U.K.’s Financial Conduct Authority in an effort to bring legal clarity to policies held by at least 370,000 clients. The ruling is binding for the eight insurers, and could affect others that have policies with similar wording, including Allianz SE, American International Group Inc. and Chubb Ltd.

The court ruled in the FCA’s favor on the “majority of the key issues,” Christopher Woolard, the regulator’s interim chief executive, said on Tuesday in a statement after the ruling was released. Yet insurers also found cause for optimism. Hiscox estimated the impact at less than 100 million pounds ($129 million) after compensation from its reinsurers -- about 150 million pounds less than its worst-case scenario. Its shares rose as much as 23%.

“This long-awaited High Court decision in favor of many policyholders will have ripple effects for the entire marketplace, providing a road map to businesses and insurers for handling business interruption claims,” said Steven Skiba, legal director at law firm Shakespeare Martineau.

Legal Battles

The London case is one of thousands of legal battles around the world centered on business-interruption policies that insurers contend don’t cover pandemics. In the U.S., New York retailer Century 21 Stores sued several of its insurance providers over the failure to pay about $175 million in claims, money the chain insists could have helped it avoid bankruptcy. In France, AXA SA agreed to cover losses sustained by several hundred restaurants after losing a court case brought by one owner.

Insurers may need to reexamine thousands of claims filed by firms holding business interruption and other policies that offered protection against unexpected halts to operations. While the full scale of the payouts isn’t yet clear, some insurers including Hiscox raised additional capital earlier in the year as Covid shut down economies worldwide.

“This ruling will provide hope for many businesses that have been put through the mill whilst seeking insurance payouts,” said Mel Stride, head of Parliament’s Treasury Committee. “It’s now vital that all those who should be paid receive these payments as soon as possible.”

Read more: Interruption Insurance Isn’t Saving Anyone From Covid Shutdowns

For RSA, the ruling will mean about 85 million pounds in costs after reinsurance, with that amount expected to come down further, according to a company statement. The insurer said it plans to resume dividend payments. Its shares rose as much as 7.3%.

The decision can be appealed, though the FCA said insurers should already be considering how to move claims forward. Both Hiscox and RSA said their loss estimates could change based on the outcome of any appeal.

“If this is indeed appealed in the coming days, then the appellate court will have a delicate balancing act on its hands,” said Julien Luke, commercial litigation partner at law firm TLT. “The decisive judgment will impact the health of the U.K. economy and the fate of heavily disrupted sectors such as leisure, hospitality and retail.”

(Updates with lawyers’ comments in fourth, final paragraphs)

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