Some of the world’s biggest insurers are wrong to deny a payout to hundreds of thousands of small British businesses, battered by the COVID-19 pandemic, the London High Court was told on Monday.

Britain’s markets watchdog has taken eight insurers, including Hiscox, RSA, QBE and Zurich to court.

A ruling against the insurers could mean tens of millions of dollars in additional claims, hitting a sector that is already facing its biggest test to date. Lloyd’s of London, the world’s largest insurance exchange, estimated the global pandemic could cost insurers more than $200 billion.

The businesses, from restaurants to leisure groups, said they faced ruin after insurers rejected their attempts to claim millions of pounds collectively in compensation for lost business.

Colin Edelman, a lawyer representing the Financial Conduct Authority, told the court on the first day of an eight-day hearing that the 17 policy wordings under scrutiny in the case were similar to wordings used by more than 60 insurers in total. Around 370,000 policyholders could be affected, he said.

The FCA says the pandemic should trigger payments under the policies, which provide cover when insured premises cannot be used because of restrictions imposed by a public authority and in the event of a notifiable disease.

The insurers say the policies covered local incidents,rather than a pandemic and national lockdown.

“They’re not to be protected from the fact that a cataclysmic event has happened. That’s just bad luck being an insurer,” Edelman said.

The hearing is due to conclude on July 30.

The FCA,which is concerned customers should be treated fairly, said in its skeleton argument published last week that the policyholders in the case were “generally not sophisticated or well-resourced insurance buyers”.

“Critically, where any policy wording is ambiguous, the court will interpret it against the insurers,” said Sarah Jane Mahmud, an analyst with Bloomberg Intelligence.

The trial is one of a number of global cases over business interruption claims. AXA SA, France’s largest insurer, was ordered by a court to pay a Parisian restaurateur two months of lock down-related revenue, and the firm has since agreed to cover losses sustained by several hundred cafes during the shutdown.

Policies held by around 370,000 policyholders could be affected by the case.“We have moved at pace to bring this action to court to provide clarity for insurers and policyholders,” the FCA said in a statement. “The start of the court proceedings marks a significant step forward in the process.”

The Financial Conduct Authority brought the UK case on behalf of aggrieved policyholders, and the court decision would also affect more than 20 other insurers including Allianz SE, American International Group Inc., and Chubb Ltd.

The so-called test case will hinge on whether the terms of small business owners’ policies give the insurers a loophole. There are disputes on a number of different wordings, including whether physical damage needs to be sustained in order for payouts to be warranted and how close a coronavirus case has to be to the business for an insurer to make good on a claim.

Even if the FCA wins, some policyholders may “face challenges from insurers when it comes to proving and quantifying their loss,” said Samantha Holland, head of insurance at law firm Gowling WLG in Birmingham, England.

Lawyers for Hiscox and other 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 and UK firms would have lost out similarly.