Insurers are set to argue against paying out fully on claims made by businesses forced to shut because of the pandemic, saying that shops in Sweden lost money even without a strict lockdown.

The strategy was raised at the first case management hearing Tuesday in the Financial Conduct Authority’s London lawsuit seeking clarity on the limits of business interruption insurance amid the coronavirus crisis.

Lawyers for Hiscox Ltd. and other insurers said Sweden is an example of a country where no firm lockdown restrictions were implemented, but businesses still suffered. The Swedish example is key to the insurers’ defense because some policies cover losses resulting from government action, but not necessarily pandemics.

The court case is one of a number of battles across the world, where insurers and clients are fighting over whether coverage extends to measures taken by governments to halt the spread of coronavirus. In France, AXA SA was ordered by a Paris court last month to compensate a restaurant owner for two months of virus-related losses.

“Some proportion of the UK businesses’ losses could not properly be said to have been caused by COVID alone,” said Jonathan Gaisman QC, a lawyer for Hiscox. One way that this might be examined is for the court “to compare the situation in the UK with that in Sweden.”

Sweden, in stark contrast to most other countries in Europe, enforced softer lockdown measures, leading to one of the highest death rates in the world relative to population. Despite the more lenient measures, the country’s economy has taken a hit with Finance Minister Magdalena Andersson estimating the Scandinavian nation is set for a 7% drop in gross domestic product.

The FCA trial is due to start in London’s High Court in July and will examine 17 policy wordings and try to establish whether a number of insurers should pay out on business interruption insurance.

In addition, other insurers in the case include RSA Insurance Group Plc, Zurich Insurance Group AG and MS Amlin Ltd.

–With assistance from Ellen Milligan.