A recent court case involved a dispute between a policyholder and Aviva, an insurance company, over business income loss due to a flood. The policyholder had made a claim under their insurance policy, seeking compensation for the loss of business income resulting from the flood. However, Aviva’s assessment of the loss was deemed inadequate by the court.
The court ultimately ruled in favor of the policyholder, finding that Aviva had failed to provide sufficient compensation as required by the policy. The key issue in the case was the indemnity period, which refers to the period of time during which the insurance company is liable to pay for business income losses.
The court determined that the indemnity period should have commenced on October 1, 2016, which was the date the business was expected to open. The period should have then continued until December 21, 2017, which is 12 months after the flood occurred. This ruling was significant, as it meant that Aviva was liable to pay for a longer period than they had initially assessed.
The judge presiding over the case found that Aviva’s assessment of the business income loss was flawed, as it ignored important factors that affected the business’s potential revenue. This meant that Aviva’s calculation of the loss was too low, and the policyholder was entitled to receive more compensation.
The court’s decision highlights the importance of carefully assessing business income losses in the event of a disaster such as a flood. Insurance companies have a responsibility to provide adequate compensation to policyholders, taking into account all relevant factors that may affect the business’s revenue. In this case, Aviva’s failure to do so resulted in a successful claim by the policyholder, and the company was required to pay out more in compensation.
The outcome of this case serves as a reminder to insurance companies to ensure that their assessments of business income losses are thorough and accurate. Policyholders shouldn’t hesitate to challenge an insurance company’s assessment if they believe it to be inadequate, as the policyholder in this case was able to secure a more favorable outcome through the court.