Case Study: Good Group business interruption insurance claim

The Good Group operates the well-known Harbourside and Botswana Butchery restaurants in the historic Ferry Building on Quay Street, Auckland.

In late 2017 and early 2018 Auckland Transport undertook work to repair the seawall under the Ferry Building.  This resulted in disruption because of obstructed views and the use of noisy machinery that resulted in financial losses for Good Group.  

Good Group asked Marsh if there was a claim which could be made for its losses.

On investigation, Marsh found the work was undertaken to repair erosion or scour to the seawall caused by wash from ferries following relocation of their operations to Pier 1A next to the Ferry Building.  The damage had not been observed at the previous inspection and there were some concerns emerging about the stability of the wall.  This provided scope for argument that a business interruption claim was triggered under an aspect of the policy’s Public Authorities extension – which provided cover for loss caused by action of a public authority due to threat or fear of damage.

With the assistance of Marsh, Good Group successfully negotiated what proved to be a complex claim with the insurer.

Business Interruption Explained

When normal operations of a business are interrupted by an unexpected property loss or damage, expected business income is often also interrupted. Without the usual stream of income, a business may struggle to cover its operating costs or achieve a reasonable level of profit.

The reality is that incidents often occur outside of one’s control. To limit loss of earnings and cap additional expense due to a business interruption, most companies and businesses obtain insurance coverage to compensate for the financial consequences of an unforeseen incident.

Whether you are a sole trader, run a local business, or own a small to medium-sized company, business interruption policies should be a key consideration for your risk mitigation strategies.

Policies are intended to help restore a business to the financial position it was in if the loss or damage (or other event triggering coverage – in this case repairs to a seawall) had not occurred, by making up for lost income, assisting with cash flow and helping cover ongoing additional costs.

Business Interruption policies can be complex and multifaceted. Marsh brings a level of service, support, and industry-leading knowledge to get positive outcomes for our clients. The value of having an intermediary to support businesses of all sizes in times of crisis has been proven time and time again and that is why many businesses turn to Marsh for support.

To talk about your cover or better understand, manage, and measure risks, please contact us here.

_{The information contained in this publication provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Insureds should consult their insurance and legal advisors regarding specific coverage issues. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable policy. Except as may be set forth in an agreement between you and Marsh, Marsh shall have no obligation to update this publication and shall have no liability to you or any other party with regard to the information contained herein. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage.}

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