CAN CASHFLOW PROTECTION HELP IN LOCKDOWN?
Author: FSB Insurance Service
Tags: Coronavirus
Published 20/08/20
Last updated 31/03/21
We have been asking FSB members to participate in a survey on how businesses have been affected by the lockdown. The survey was intended to determine how a dual effort between the Government and Insurance industry can build a cashflow protection product to help businesses in the event of a future government lockdown.
The effects of lockdown on businesses
Approximately 87% of respondents had experienced a decrease in their company’s turnover, with 55% of respondents stating turnover had fallen by 50% since the start of lockdown.
There has been a sharp rise in disputed Business Interruption claims since lockdown began, with the FCA leading a test case in the UK courts to determine what claims should be paid. This trial has now concluded and we are awaiting to hear the judgement. You can read updates on the FCA’s website at https://www.fca.org.uk/firms/business-interruption-insurance
When asked whether they’d consider purchasing cashflow protection in the event of a future government lockdown, 74% of respondents said that they would. Most respondents agree that having businesses’ cashflow protected would be a very helpful safety cushion in the event of a second nationwide government lockdown.
The survey is based on 546 responses from FSBIS registered members in August 2020.
How we’re helping businesses in the meantime
Pandemic Re is still being worked on, but in the meantime, we have many other products available to help our members continue trading. Products such as our single-invoice credit insurance portal and Business Continuity Planning kits have been used by thousands of FSB members to help their businesses throughout lockdown.
We have partnered with Inoni to offer free Business Continuity Planning (BCP) kits exclusively to our members. Registered members will have received a ‘Welcome Pack’ with details on how to access this. It’s important to have a BCP at this moment in time as it could help your business survive a major disruptive event. For more information on BCP kits you can click here.
Finally, we have credit insurance, available to members. This is a great tool if you are worried about the possibility of your debtors going into administration or not being able to pay. This will protect you from any written off debt. For further information on this here.