Business Interruption and Cessation of A Business

A Victorian hotel destroyed in the bushfires has recently contested the issue of what constitutes cessation of a business and payment for ongoing Loss of Gross Profit. The Conditions to the Industrial Special Risks (ISR) policy contains a clause for termination of cover under Section 2, Consequential Loss. It advises cover ceases if:

1. The Insured ceases to carry on the Business, or
2. The Business is disposed of;
3. The Insured (being a corporation) is placed in liquidation
4. The Insured (being a natural person) becomes a bankrupt.

All the facts surrounding a loss and reinstatement need to be considered. In the case of the bushfires, rezoning, bushfire attack levels, and development applications have reasonably delayed reinstatement.

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Author

Published with permission of Claim Solutions Pty Ltd.

Insurance Policy

Country: - Australia.

Policy Description: - Mark IV Industrial Special Risks (ISR) policy.

Insurer: - Not specified.

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