As the previous restrictions preventing any creditor from presenting a winding up petition to the court expired on 30 September 2021, new legislation has now been put in place, in a further effort to reduce the number of companies being wound up by the...
What is Business Interruption Insurance?
Business interruption insurance is a type of insurance that covers the loss of income and consequential losses when a business is unable to carry out business as usual. This could be caused by a natural disaster or a disease outbreak. The income loss covered may be due to disaster-related closing of the business facility or due to the rebuilding process after a disaster.
This type of cover does differ from property insurance. Property insurance will cover the physical damage of the business.
Business interruption insurance is under the spotlight currently due to the devastating impact that Covid-19 has had on many businesses. Some insurers have refused to pay out for business interruption caused by Coronavirus. The FCA brought action through the High Court by way of a test case for a determination on business interruption cover. The Court has determined that many (but not all) of the sample policy wording it looked at provided cover. Whilst the judgment may be appealed it does mean that many businesses with business interruption cover may now be entitled to be provided cover by their insurers.
The judgment will be welcomed by many businesses but it is important that the individual policy is considered against the wording of the judgment to ascertain if cover should be applied.