Covid-19 Business Interruption –UPDATE January 2021:
The High Court have now ruled that many rejected Covid-19 business interruption insurance claims should be paid. For specific information about this, please read our business interruption advice page here
When a business is hit by a flood, fire or other disaster, the company’s work will usually be interrupted for some amount of time while repairs, assessments and other procedures are taken care of. Sometimes this will only put the business out of action for a few days or weeks, but sometimes it affects the business’s operations for much longer. However devastating the damage and the aftermath of the event, business interruption insurance protects the company against any financial loss during this time.
For many businesses, having business interruption insurance can be the difference between getting a company back on track as quickly as possible and losing the entire business overnight. Business interruption insurance covers you for the entire indemnity period specified when you take out the policy, and could help you recover a financial loss for several months or even a couple of years. For almost any business, that’s a significant slice of the balance sheet.
A loss of business can be one of the most complicated types of insurance claim because it’s based on your company’s forecasts and the potential profit you will be losing, but it’s not one your company should skip. As these examples show, it could just save your business should something terrible happen.
Example 1: A Flood in Doncaster
When a steel processing firm suffered flooding at the premises, they turned to Morgan Clark for help with their business interruption insurance claim. Morgan Clark’s specialists helped the company receive their full entitlement, covering the cost of moving the company to a new warehouse, compensation for the theoretical period it would have taken to move back into the old warehouses and loss of turnover during the claims process, despite the company’s profits increasing during this time.
As well as helping the company claim £630,000 under the business interruption policy, Morgan Clark also helped the business draw up a plan for a new approach to trading after the disaster. This not only helped the business return to trading quicker but also rationalised the company’s operations.
Example 2: An explosion in Buncefield
An electronics company enlisted the help of Morgan Clark when the business suffered a major explosion and needed to make a loss of business claim. Morgan Clark’s specialists worked with the senior management team to devise a temporary way to restructure operations so the company could resume trading as quickly as possible.
During this time, Morgan Clark helped the company to claim £1.8m on its business interruption insurance policy. This covered the cost of relocating as well as emergency funding to maintain cash flow. Despite a temporary fall in turnover due to the group’s recent rationalisation and restructuring programme, Morgan Clark argued that the company’s profits would have increased and was able to claim for a greater financial loss. With this, the company was able to make a speedy recovery.
Claiming on your business insurance can be time-consuming and stressful, especially when your company has suffered a loss. Get in touch to find out how Morgan Clark’s team of experienced Loss Assessors can help you through the entire process, so you can focus on getting back to business as usual.