Business Interruption cover has been highlighted recently when Cape Town restaurant, Café Chameleon, won their court battle against their insurer for losses suffered due to the Covid-19 pandemic and subsequent lockdown. Getting advice on the type of insurance cover your business will need is essential in protecting your business. Not only will you require insurance for your property, goods, company vehicles etc. you will want Business Interruption Cover for when things beyond your control prevent your business from trading.
Business Interruption (BI) insurance will mean the difference between you closing your business or the ability to survive in a time of crisis. Lost income can be covered by BI insurance and will provide you peace of mind when you need it most.
Business Interruption cover effectively insures a business against the loss of revenue it experiences due to an unforeseen event. Therefore, a business can continue to pay overheads or expenses during a period of downtime caused by the unforeseen event or crisis. Many businesses across the globe were not properly insured for this event and as such have been forced to enter liquidation or business rescue.
Insuring your business comprehensively not only makes sound business sense, it is a lifeline to SME’s if ever they need to rely on it. Your business insurance should work as hard as your business does, which is why Business Interruption Insurance is a must.
What does BI Insurance Cover?
Typically, there are three parties involved when setting up an inter vivos trust:
What you need to know about BI Insurance
It is the last point above that some business owners appear to misunderstand. In essence, proceeds paid out to a business in lieu of earning trade income (due to a qualifying BI event) would take the general form of that trade income, for income tax purposes. Interpretation is key and this is where a seasoned and trained income tax specialist is recommended.
At the MMS Group, we offer the services of several income tax specialists, who can assist you with interpretations of the taxation status of BI funds. Reach out to us by calling 011 672 0020 or 021 410 8709.
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