Originally written by Steven Skiba on Small Business
A crucial High Court ruling is set to determine whether insurers will have to pay out under business interruption insurance policies, to meet claims for COVID-19-related losses.
While the Financial Conduct Authority (FCA) test case is set to provide much-needed clarity to businesses and insurers alike, paying close attention to the wording of individual policies is key to making a successful business interruption insurance claim.
So, what else do businesses need to consider in order to maximise their chances of success, and what are their options in the event that a claim is rejected?
Landmark High Court case
The issue of whether business interruption insurance policies cover pandemic-related losses is one of the most controversial legal issues resulting from the coronavirus crisis. In bringing its test case to the High Court, the FCA is aiming to provide a roadmap to businesses and insurers regarding how to interpret the wording of policies and therefore the amount that should fairly be awarded.
Worth potentially billions of pounds, the case has involved examining 17 policy wordings from eight different insurers in order to determine whether COVID-19 triggers a pay-out. However, the ruling is expected to have ripple effects for the entire
Tag Archive for Coronavirus
Hot Business News Today
How do I apply for a Coronavirus Business Interruption Loan?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
How do I apply for a Coronavirus Business Interruption Loan?
UPDATED: Today (July 30), the Coronavirus Business Interruption Loan Scheme has been relaxed to make more SMEs eligible for emergency funding.
Until now, an SME that was classed as an ‘undertaking in difficulty’ was barred from getting access to the loan unless the business was less than three years old. They’d be an undertaking in difficulty if, by deducting accumulated losses from its reserves, it was left with a negative amount greater than half of its subscribed share capital, as of December 2019.
This changes mean that SMEs with fewer than 50 employees and a turnover of less than £9m will not be classed as an undertaking in difficulty, unless they’re subject to insolvency proceedings or receiving certain types of aid. It’s expected to help small businesses that have previously secured private equity and venture capital funding.
Allie Renison, head of Europe and trade policy at the Institute of Directors, said:
“This is a welcome move towards helping more British businesses access much-needed finance. The UID test has caused a lot of frustration, and the IoD has been knocking hard on the door of both government and Brussels
Hot Business News Today
Nearly a quarter of small businesses cut jobs despite furlough scheme
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
The latest research from the Federation of Small Businesses (FSB) shows that 23 per cent of firms had already cut jobs in the last quarter, which is an all-time record for the survey.
This is predicted to become even more of an issue as the furlough scheme starts to taper off next month. The scheme has covered the wages of over 9m workers since it was introduced in April. But starting August 1st employers will need to start paying national insurance and pension contributions for furloughed staff, putting a further financial strain on bosses.
Begbies Traynor have carried out research of their own showing that an increasing number of small businesses are in distress. In fact, the number has risen by 16,000 since the end of March this year, now totalling 52,000 businesses. By ‘in distress’, Red Flag means that a businesses has had a minor County Court Judgement (of less than £5k) filed against them or that they’ve been identified in Red Flag’s credit scoring system as having a key or marked deterioration in key financial indicators.
The firm’s latest Red Flag report shows that this Q2 was the seventh consecutive quarter showing an increase
Hot Business News Today
Nearly a quarter of small businesses cut jobs despite furlough scheme
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
The latest research from the Federation of Small Businesses (FSB) shows that 23 per cent of firms had already cut jobs in the last quarter, which is an all-time record for the survey.
This is predicted to become even more of an issue as the furlough scheme starts to taper off next month. The scheme has covered the wages of over 9m workers since it was introduced in April. But starting August 1st employers will need to start paying national insurance and pension contributions for furloughed staff, putting a further financial strain on bosses.
Begbies Traynor have carried out research of their own showing that an increasing number of small businesses are in distress. In fact, the number has risen by 16,000 since the end of March this year, now totalling 52,000 businesses. By ‘in distress’, Red Flag means that a businesses has had a minor County Court Judgement (of less than £5k) filed against them or that they’ve been identified in Red Flag’s credit scoring system as having a key or marked deterioration in key financial indicators.
The firm’s latest Red Flag report shows that this Q2 was the seventh consecutive quarter showing an increase
Hot Business News Today
Why the Government’s new insolvency bill is bad news for sole traders
by Simon Dolan • • 0 Comments
Originally written by Simon Dolan on Small Business
Earlier this month, aviation millionaire Simon Dolan, who is worth £200m according to the Sunday Times Rich List, lost his bid to bring a High Court challenge against the Government over the coronavirus response. He is appealing against the against the decision denying him permission to bring a judicial review over lockdown.
When I first initiated legal proceedings against the Government over the introduction of lockdown, the last thing I thought I would be talking about is the changes to the Insolvency Act, and yet these changes are fundamental, regressive, and without doubt will lead to far more issues – all in a vain attempt to prop up the economy for a few more weeks.
Yet, as an accountant with over 30 years’ worth of experience in the industry, I have looked on in horror over the last few months as the Corporate Insolvency and Governance Act breezed through the Commons and Lords without any adequate scrutiny and became law two weeks ago.
>See also: How to deal with a furloughed employee who refuses to return to work
What the Corporate Insolvency and Governance Act means
In the round, the introduction of the Corporate Insolvency and Governance Act
Hot Business News Today
Insurer using small business Covid grants to justify cutting payouts
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
NFU Mutual, the insurance company, is using small business Covid grants already received by business owners as a pretext to cutting coronavirus payouts.
The insurer is paying less to struggling small businesses in the hospitality sector because it says they have received small business Covid grants.
The Government has paid more than £10bn to almost 900,000 small businesses in need in the form of one-off grants of up to £10,000, paid out by local authorities.
NFU Mutual said deductions made to reflect state aid are only applied to loss-of-profit claims, not to those made for loss of income. Determining a loss-of-profit claim settlement, it said, includes the need to consider “all taxable income”, including Government grants, as well as any other forms of compensation.
However, the Professional Association of Self Caterers UK (PASC) has branded the practice “highly immoral” and suggests NFU Mutual is using it to boost its own profits.
PASC UK executive chairman Alistair Handyside told insurance trade magazine NS Insurance that insurers should honour their contracts and not behave “so poorly”.
Handyside said: “Overwhelmingly our members are small, family-run, rural and coastal businesses for whom the Small Business Grant Fund is a critical lifeline intended to
Hot Business News Today
Insurer using small business Covid grants to justify cutting payouts
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
NFU Mutual, the insurance company, is using small business Covid grants already received by business owners as a pretext to cutting coronavirus payouts.
The insurer is paying less to struggling small businesses in the hospitality sector because it says they have received small business Covid grants.
The Government has paid more than £10bn to almost 900,000 small businesses in need in the form of one-off grants of up to £10,000, paid out by local authorities.
NFU Mutual said deductions made to reflect state aid are only applied to loss-of-profit claims, not to those made for loss of income. Determining a loss-of-profit claim settlement, it said, includes the need to consider “all taxable income”, including Government grants, as well as any other forms of compensation.
However, the Professional Association of Self Caterers UK (PASC) has branded the practice “highly immoral” and suggests NFU Mutual is using it to boost its own profits.
PASC UK executive chairman Alistair Handyside told insurance trade magazine NS Insurance that insurers should honour their contracts and not behave “so poorly”.
Handyside said: “Overwhelmingly our members are small, family-run, rural and coastal businesses for whom the Small Business Grant Fund is a critical lifeline intended to
Hot Business News Today
How to cope with the slow return to trade post-lockdown
by Stuart Crook • • 0 Comments
Originally written by Stuart Crook on Small Business
July 4 marked the most recent phase of coronavirus restrictions easing in the UK, which allowed for pubs, restaurants, and private events to return to trade post-lockdown. Engineering, construction, and non-essential retail had already re-opened, however many are discovering that it isn’t simply a case of “business as usual”.
The Government has offered many different forms of financial aid during the pandemic to help businesses weather the economic freeze, including the Coronavirus Job Retention Scheme (CJRS), Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loans (BBL), which have all been greatly received. However, even with businesses opening their doors to the public again, there are new rules and restrictions in place which must be followed which will impact on the bottom line of businesses and squeeze margins.
So, the challenge now isn’t so much restarting operations, but finding a way to do so profitably.
>See also: A quarter of entrepreneurs don’t use social media for their small business
Demand for sales
The Government was praised for its £330bn war chest at the beginning of lockdown to help businesses survive and protect the nation from mass unemployment. The idea was that it would protect the economy and ensure
Hot Business News Today
How to cope with the slow return to trade post-lockdown
by Stuart Crook • • 0 Comments
Originally written by Stuart Crook on Small Business
July 4 marked the most recent phase of coronavirus restrictions easing in the UK, which allowed for pubs, restaurants, and private events to return to trade post-lockdown. Engineering, construction, and non-essential retail had already re-opened, however many are discovering that it isn’t simply a case of “business as usual”.
The Government has offered many different forms of financial aid during the pandemic to help businesses weather the economic freeze, including the Coronavirus Job Retention Scheme (CJRS), Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loans (BBL), which have all been greatly received. However, even with businesses opening their doors to the public again, there are new rules and restrictions in place which must be followed which will impact on the bottom line of businesses and squeeze margins.
So, the challenge now isn’t so much restarting operations, but finding a way to do so profitably.
>See also: A quarter of entrepreneurs don’t use social media for their small business
Demand for sales
The Government was praised for its £330bn war chest at the beginning of lockdown to help businesses survive and protect the nation from mass unemployment. The idea was that it would protect the economy and ensure
Hot Business News Today
Coronavirus small business diary – James Cadbury, Love Cocoa
by James Cadbury • • 0 Comments
Originally written by James Cadbury on Small Business
Love Cocoa is the luxury, ethical chocolate start-up created by James Cadbury (great-great-great grandson of Cadbury founder John Cadbury).
Based in Dalston, London, Love Cocoa has five full-time staff, while production of its handmade chocolate is outsourced to a family-run factory based in Stoke.
The brand offers luxury, ethical chocolate sustainably sourced from Columbia, palm-oil free with 100 per cent recyclable packaging and compostable inners made from wood pulp. Quirky flavours included gin and tonic, avocado and birthday cake.
The brand turned down an investment offer from Dragons’ Den in 2018 and has grown 400 per cent since to become a million-pound brand.
Love Cocoa is about to redesign its brand and launch a tree-planting project – “One bar = one tree”; for every Love Cocoa product sold, the company will plant a tree in partnership with the charity Trees for the Future, with the aim of planting over 500,000 trees in northern Cameroon in 2020, helping cocoa farmers gain a much needed second source of income while combating deforestation and climate change.
>See also: Coronavirus small business diary – Alessandro Savelli, Pasta Evangelists
25th January
We begin to think that the path ahead might be tricky when the bespoke