What to know about business interruption insurance claim

With the current healthcare pandemic affecting all retail businesses across the UK, it’s clear that times like these are especially challenging for those looking to bounce back.

As footfall rates continue to drop and hit all-time-lows, most businesses are now amid a critical period outlined with more challenges. Despite the government’s optimism on a full-fledged comeback and a “V-shaped” curve, the truth is that every retailer has a significant reason to be concerned over what may take place in the future.
Given the significant decreases in profit and minimal dents that stimulus checks are making on recovery, retail businesses must now backtrack and consider their business interruption insurance.

What is business interruption insurance?

If you’ve stayed updated on the latest news in the UK retail industry, you may be familiar with the term in question as it has been brought up frequently in recent weeks. However, if you are not familiar with the term, business interruption insurance is defined as a policy designed, formulated, and provided to cover the financial losses of any firm that cannot trade as usual due to an unexpected event. Currently, the parameters of this policy are seen as applicable by many retailers amid the government’s recommendations for companies to close shop to fulfil social distancing guidelines. 

Where does it apply, and when can you claim it?

Although it may seem quite straightforward, the applicability of business interruption insurance during times like these can vary depending on who provides the policy and what’s in the fine print. Here are three common ways or reasons that any British retailer can claim on their system:

Claim basis #1: Denial of access

Even though the UK government did not explicitly make a closure order, specific shops (such as pubs or parlours) have had to shut their premises down due to the pandemic. If your business had to close shop for the meantime because of specific circumstances associated with the health crisis, then you may claim your interruption policy under a denial of access clause.

Claim basis #2: Notifiable disease

With COVID-19 being classified by the government as a notifiable disease, establishments that have had confirmed cases on their premises may make their claims based on the clause of the disease classification. Having a confirmed case on your business premises can serve as an adequate basis to claim because this clause is intended to cover situations where premises have been infected.

Claim basis #3: Supply chain issues

Another “saving grace” that has allowed UK retailers to coup their losses and make claims on their business interruption is the supply chain issue clause. Defined as an instance where a retailer cannot operate due to gaps in its supply as a result of restrictions on routes, this clause is applicable for those who can prove that the issue has a direct impact on their business. 


In times like these where leaving one’s home is discouraged over fears brought about the pandemic, retail businesses must now find different ways to recoup their losses so that they won’t need to close shop. By taking the time to check if you have a right to claim your business interruption insurance, however, you can keep your shop afloat well enough until the economy reopens!

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