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Business Interruption Insurance ruling

UK judges recently ruled that some of the world’s biggest insurers were wrong to reject tens of thousands of claims from small firms battered by the COVID-19 pandemic.


The FCA have also weighed in noting that insurers should proactively make interim payments to policy holders to help alleviate pressures. “Our objective remains to ensure that slow payment does not exacerbate financial pressures on policyholders,” Christopher Woolard FCA.


Do you know how to calculate your claim? In most cases, you will need to show your insurer that you lost profits due to COVID19. This will mean showing your historical trading position with what happened during the lockdown restrictions. Sound simple? Not so; firstly, you’ll have to account for any government support received and then, you’ll need to calculate the cost to the business of the interruption, not the lost revenue. If you didn’t make the sale then likely you didn’t incur a significant portion of the cost to make the sale either. You may find the insurer believes it cost you a lot less than you think under the lockdown restrictions.

Contact your insurer first to understand exactly how they assess the interruption clause before sending them reams of management information.



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