Business interruption policy may not pay for losses made under lockdown

Compensation will, however, be paid if a director covered by a Keyman insurance policy loses his life to Covid-19

Amit Aggarwal (name changed on request), 47, runs a garment manufacturing unit in Noida. To protect his establishment, he has purchased a property/fire insurance cover. Bundled within his policy is what’s called a business interruption (or BI, also called ‘loss of profit’) cover. His unit has come to a standstill owing to the lockdown. Aggarwal is keen to know if the BI cover will compensate him for his losses.

A bundled cover: General insurers offer the BI cover to commercial establishments like restaurants, shops, factories, etc. This cover comes bundled with a property/fire policy. The latter provides protection against loss