Walmsley on Business Interruption Insurance, 2nd Edition

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ISBN 9781856094436
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For anyone who already works within the business interruption insurance industry or any new starter to the world of insurance, the book has shed a new ray of light on an otherwise difficult subject, successfully navigating the reader’s way around the complexities of the topic. The book is not just filled with dry business interruption insurance explanations and terminology; it is contextualised within a legal environment by quoting and applying useful and topical case law.

Author: Celso de Azevedo

The purpose of this second edition has remained to provide a concise guide to business interruption insurance law and especially to tackle practical claims issues arising from the widely followed standard terms of the UK Gross Profit Form. This book is aimed at all insurance industry professionals involved directly or indirectly in risk management, loss assessment, underwriting and claims handling. This second edition is based on the law in force on 15th May 2016.


Preface to the Second Edition
List of Cases
List of Statutes

1 Underwriting Process and Loss Assessment
Risk Management and Business Interruption Insurance
Underwriting Process
Loss Assessment and the Adjuster’s Report on Claims

2 The Indemnity Principle
The Indemnity Principle
Insurable Interest
The Material Damage Proviso

3 The Schedule and Extensions
The Schedule
The Insurer
The Insured
The Business
The Premises
Extensions to other Premises
ABI Extension Wordings – Suppliers and Customers
Other ABI Extensions
Public Utilities
Storage Premises
Goods in Store
Patterns and Designs at Third Party Premises
Professionals’ Documents
Motor Trade
Prevention (or Denial) of Access
Loss of Attraction
Wide Area Damage and the Adjustments/Other Circumstances/Trends Clause

4 Proximate Cause, Perils, Exclusions and Extensions
Proximate Cause
Intervening Successive Causes

Concurrent Causes
Burden of Proof

1. Fire
Heating Processes
2. Lightning
3. Explosion
General Exclusions
Excluded Perils
Extensions - Additional and Special Perils
Excluded Perils that may be Reinstated
Other Additional Perils
Special Business Interruption Extensions

5 Gross Profit, Sum Insured and Uninsured Working Expenses

A) Gross Profit and the Sum Insured
The Sum Insured
The Maximum Indemnity Period
Historical Accounts and the Maximum Indemnity Period

B) Uninsured Working Expenses
Trading, Profit and Loss Accounts
Other Expenses
C) Related Additional Clauses
Uninsured Standing Charges Clause
Premium Adjustment Clauses
Declaration-Linked Basis of Cover

6 Clause (a); Gross Profit; Adjustments Clause; Special and Additional Clauses

Clause (a)
Gross Profit
The Rate of Gross Profit
Standard Turnover
The Adjustments Clause
Indemnity Period
Special and Additional Clauses

7 Clause (b); Increase in Cost of Working and Additional Increase in Cost of Working

Increase in Cost of Working
Extra Expenses and Increase in Cost of Working
Additional Increase in Cost of Working

8 CLAIMS: Savings, Depreciation; Underinsurance and Material Damage Overlap Savings

Underinsurance and Uninsured Standing Charges
Under-recovery of Increase in Cost of Working
Material Damage Overlap and Savings
Manufacturer’s Stock and Work in Progress
Wages for Clean-up and Restoration

9 Variations on the Basic Form of Cover

Increase in Cost of Working Only
Legal Costs and Expenses to Reinstate Documents and Data
Fines or Damages for Breach of Contract
Loss of Records of Book Debts
Research Establishment Expenditure
Advance Loss of Profits
Engineering Machinery Breakdown
Cyber Risks
Gross Revenue
Power Generation
Other Package Policies
Flexible Limit of Loss Cover
Alternative Methods of Measurement of Loss

10 Contribution and Subrogation


Appendix A
 Association of British Insurers Recommended Policy Wordings, Extensions and Clauses
Appendix B Book Debts

List of Cases

Ace European Group Ltd and Others v Chartis Insurance UK Ltd [2013] EWCA Civ 224
The Achilleas [2008] UKHL 48
Addis v Gramophone Co Ltd [1909] AC 488
Aegis Electrical and Gas International Services Co Ltd v Continental
Casualty Co [2007] EWHC 1762 (Comm)
American Tobacco Co Inc v Guardian Assurance Co [1925] 22 Ll LR
Anderson v Commercial Union Assurance Co Plc [1998] SLT 826
Ansari v New India Assurance Ltd [2009] EWCA Civ 93
Arbory Group Ltd v West Craven Insurance Services [2007] Lloyd’s Rep IR 491
Ashcroft v Curtin [1971] 1 WLR 1731
Austin v Drewe [1815] 4 Campb 360
Austin v Zurich General Accident & Liability Insurance Co [1945] 1KB 250 at 258
Axa General Insurance Ltd v Gottlieb [2005] Lloyd’s Rep IR 369
AXL Resources Ltd v Antares Underwriting Services Ltd [2011] Lloyd’s Rep IR 598
Bacon v Cooper (Metals) Ltd [1982] 1 All ER 397
Bank of British North America v Western Assurance Co [1884] 7 Ont R 166
Boag v Economic Insurance Co Ltd [1954] 2 Lloyd’s Rep 581
Bovis Construction Ltd v Commercial Union Assurance [2001] 1 Lloyd’s Rep 416 at pg 418
Brit Inns Ltd and Others v BDW Trading Ltd [2012] EWHC 2143 (TCC)
Burnand v Rodoconachi [1882] 7 App Cas 333 at pg 339
Burts and Harvey Ltd v Vulcan Boiler & General Insurance Co Ltd [1966] 1 Lloyd’s Rep 161
Cameron Lumber Co Ltd v Mount Royal Assurance Co [1933] 47 Ll L Rep 175
Castellain v Preston [1883] 11 QBD 380 2,
CCR Fishing Ltd v The British Reserve Insurance Co (1990) 1 SCR 814
The Cendor MOPU [2011] UKSC 5 4,

Charter Reinsurance Co Ltd v Fagan [1996] 2 WLR 726
Cia Colombiana de Seguros v Pacific Steam Navigation Co [1965] 1 QB 101
City Fire Insurance Co v Corlies, 21 Wend 367 (NY 1839)
City Tailors Ltd v Evans [1921] 91 LJKB 379 (CA) 6,
Commercial Union Assurance Co v Hayden [1977] 1 Lloyd’s Rep 1 (CA)
Commercial Union Assurance Co v Lister [1874]
Commonwealth Smelting Ltd and Another v Guardian Royal
Exchange [1986] 1 Lloyd’s Rep 121
Co-operative Retail Services Ltd v Taylor Young Partnership and Others [2002] Lloyd’s IR 555 (HL) and [2001] Lloyd’s Rep IR 122 (CA)
Coromin v Axa Re [2007] EWHC 2818 (Comm) 3,
Couplar Transport (London) Ltd v Smith’s (Acton) Ltd [1959] 1 Lloyd’s Rep 369
Crema v Cenkos Securities plc [2011] 1 WLR 2066
Curtis & Sons v Mathews [1919] 1 KB 425
David Allen & Sons (Bill Posting) Ltd v Drysdale [1939] 4 All ER 113
De Meza and Stuart v Apple, Van Straten, Shena and Stone [1975] 1 Lloyd’s Rep 498 (CA)
De Souza v Home & Overseas Insurance Co Ltd [1995] LRLR 453 4
Deepak Fertilisers & Petrochemicals Ltd v Davy McKee (London) Ltd [1999] 1 All ER (Comm)
Derry v Peek [1889] 14 AC 337
Drake Insurance Co Ltd v Provident Insurance Plc [2004]
Drinkwater v London Assurance Corporation [1767] 2 Wils 363
Duus Brown v Binning [1906] 11 Com Cas 190
Eagle Star Insurance Co Ltd v Provincial Insurance Plc [1994] 1 AC 130
England and Another v Guardian Insurance [1999] 2 All ER 481(Comm)
Enimont Supply SA v Chesapeake Shipping Inc (The Surf City) [1995] 3 Lloyd’s Rep 242
Equitas v R&Q Reinsurance Co (UK) Ltd [2010] Lloyd’s Rep IR 600
Eurokey Recycling Ltd v Giles Insurance Brokers Ltd [2014] EWHC
Feasey v Sun Life Assurance Co of Canada [2003] EWCA Civ 885
Field v Receiver of the Metropolitan Police [1907]
Fleming v Hislop [1886] LR 11 App Cas 686
Forrest & Sons Ltd v CGU Insurance plc [2006] Lloyd’s I&R Rep 113
General Accident Fire and Life Assurance Corp Ltd v Midland Bank Ltd [1940] 2 KB 388
Glasgow Training Group (Motor Trade) Ltd v Lombard Continental PLC [1989] SC 30
Glengate-KG Properties Ltd v Norwich Union Fire Insurance Society Ltd [1996] 1 Lloyd’s Rep 614
Godin v London Assurance Co [1758] 1 Burr 489 8,
Grell-Taurel Ltd v Caribbean Home Insurance Co Ltd and Others [2002] Lloyd’s Rep IR 655, CA (Trin)
Hadley v Baxendale [1854] 9 Ex 341
Harris v Birkenhead Corp [1976] 1 WLR 279
Henry Booth & Sons v Commercial Union Insurance Co Ltd [1923] 14 Ll L Rep 114
Hilda Drake v Eric Harbour [2008] EWCA Civ 25
Horse, Carriage & General Insurance Co Ltd v Petch [1916] 33 TLR 131
IF P & C Insurance Ltd v Silversea Cruises Ltd [2004] Lloyd’s Rep IR 217
Insurance Corporation of the Channel Islands v McHugh and Royal Hotel Ltd [1997] LRLR 94
Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896
The Italia Express (No. 2) [1992] 2 Lloyd’s Rep 281
John A Pike (Butchers) Ltd v Independent Insurance Co Ltd [1998] Lloyd’s Rep IR 410
John Grimes Partnership Ltd v Gubbins [2013] EWCA Civ 37
Jubilee Motor Policies Syndicate 1231 at Lloyd’s v Volvo Truck & Bus (Southern) Ltd [2010] EWHC 3641 (QB)
Kausar v Eagle Star Insurance Co Ltd [2000] Lloyd’s Rep IR 154
Kawasaki Kisen Kabushiki Kaisha of Kobe v Bantham SS Co Ltd [1939] 2 KB 544

King v Victoria Insurance Co [1896] AC 250
The Knight of St Michael [1898] P 30
Kulen Kemp v Bigne [1786] 1 TR 305 at 309
Kuwait Airways Corporation v Kuwait Insurance Co (No. 2) [2000] Lloyd’s Rep IR 439
Langdale v Mason [1780] 2 Park 965
Law Fire Assurance Co v Oakley [1888] 4 TLR 309
Legal and General Assurance Society Ltd v Drake Insurance Co Ltd[1992]
Levy v Assicurazioni Generali [1940] AC 791 (PC) 4
Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd [1918-19] All ER Rep 443
Lonsdale and Thompson Ltd v Black Arrow Group PLC and Another [1993] Ch 361
Lord Napier and Ettrick v Hunter [1993] AC 713
Lowry v Bourdieu [1780] 2 Doug KB 468 at 470
Lucena v Craufurd [1806] 2 Bos & Pul MR 269
Macaura v Northern Assurance Co [1925] AC 619
Mandrake Holdings Ltd v Countrywide Assured Group plc [2005] EWCA Civ 840
Mark Rowlands Ltd v Berni Inns Ltd [1986] 1 QB 211 2,
Mason v Sainsbury [1782] 3 Doug KB 61
Maurice v Goldsbrough Mort & Co Ltd [1939] AC 452
MH Smith (Plant Hire) Ltd v DL Mainwaring [1986] 3 Lloyd’s Rp 244
Midland Mainline Ltd and Others v Eagle Star Insurance Co Ltd [2004] EWCA Civ 1042
Milton Furniture Ltd v Brit Insurance Ltd [2014] EWHC 965 (QB) 4,
The Miss Jay Jay [1987] 1 Lloyd’s Rep 32
Moran, Galloway & Co v Uzielli [1905] 2 KB 555
Municipal Mutual Insurance Ltd v Sea Insurance Co Ltd [1998] Lloyd’s Rep IR 421
Munro, Brice & Co v The War Risk Association Ltd [1918] 2 KB 78
MW Wilson (Lace) Ltd v Eagle Star Insurance Co Ltd [1993] SLT 938
National Oilwell (UK) Ltd v Davy Offshore Ltd [1993] 2 Lloyd’s Rep 582 2,
Netherlands Insurance Co v Ljunberg & Co [1986] 2 Lloyd’s Re 19
Normhurst Ltd and Others v Dornoch Ltd and Others [2004] EWHC 567 1,
North British & Mercantile Insurance Co v London, Liverpool and Globe Insurance Co [1877] 5 Ch D 569
Nulty v Milton Keynes Borough Council [2013] Lloyd’s Rep IR 243
Oddy v Phoenix Assurance [1966] 1 Lloyd’s Rep 134
Orient-Express Hotels Ltd v Assicurazioni General SpA [2010] All ER (D) 282
Page v Scottish Insurance Corp [1929] 140 LT 571
Pan American World Airways Inc v Aetna Casualty and Surety Co [1975] 1 Lloyd’s Rep 77 (US CA 2 Cir, 1974)
Parabola Investments Ltd v Browallia Cal Ltd [2011] QB 477
Pawsey & Co v Scottish Union and National Insurance Co (The Times, 17 October 1908)
Petrofina (UK) Ltd v Magnaload Ltd [1984] QB 127 2,
Polikoff Ltd and Another v The North British and Mercantile Insurance Co Ltd [1936] 55 Ll L Rep 279
The Popi M [1985] 2 All ER 712
President of India v Lips Maritime Corporation [1988] AC 395
Ramco v International Insurance Co of Hanover [2004] 1 All ER (Comm) 866
Republic of Bolivia v Indemnity Mutual Marine Insurance Co Ltd [1909] 1 KB 785
Regina Fur Co Ltd v Bossum [1958] 2 Lloyd’s Rep 425
Rohan Investments Ltd v Cunningham [1998] EWCA Civ 44
Rookes v Banard [1964] AC 1129
RSA Insurance Plc v Dornoch Ltd [2005] 1 All ER (Comm) 590
S&M Hotels Ltd v Legal & General Assurance Society Ltd [1971]
Scottish Coal Co Ltd v Royal & Sun Alliance Insurance plc [2008] EWHC 880 (Comm)
Sexton v Mountain [1919] 1 Ll L Rep 507
Sheridan v Tynes [1971] 19 DLR (3d) 277
Simpson v Thompson [1877] 3 App Cas 279
Siu Yin Kwan and Another v Eastern Insurance Co Ltd [1994] 2 AC 199 (Privy Council)
Skandia Property (UK) Ltd v Thames Water Utilities Ltd [1999] BLR 338
Spinney’s (1948) Ltd v Royal Insurance Co Ltd [1980] 1 Lloyd’s Rep 406
Sprung v Royal Insurance [1999] Lloyd’s Rep IR 111
Stanley v Western Insurance Co [1868] LR 3 Exch 71
Stearns v Village Main Reef Gold Mining Co Ltd [1905] 21 TLR 236 1
Stock v Inglis (1884) 12 QBD 564
Stone Vickers Ltd v Appledore Ferguson Shipbuilders Ltd [1992] 2 Lloyd’s Rep 578
Stone Vickers Ltd v Appledore Ferguson Shipbuilders Ltd [1991] 2 Lloyd’s Rep 288
Sugar Hut Group Ltd and Others v AJ Insurance [2014] EWHC 3352 (Comm)
The Sylvia [2010] EWHC 542
Synergy Health (UK) Ltd v CGU Insurance Plc (t/a Norwich Union) and Others [2010] EWHC 2583 (Comm)
Ted Baker plc v AXA Insurance UK plc [2012] EWHC 1406 (Comm)
Ted Baker Plc and Another v Axa Insurance UK Plc and Others (No. 2) [2014] EWHC 3548 (Comm)
Tektrol Ltd v International Insurance Co of Hanover Ltd and Another [2005] EWCA Civ 845
Tempus Shipping Co v Louis Dreyfus [1931] AC 726
Thomas & Co v Brown [1899] 4 Com Cas 186
Toomey v Eagle Star Insurance Co Ltd [1994] 1 Lloyd’s Rep 516
Tootal Broadhurst Lee Co Ltd v London and Lancashire Fire Insurance Co (The Times, 21 May 1908)
Transthene Packaging Co Ltd v Royal Insurance Ltd [1996] LRLR 32
Tyco Fire v Rolls-Royce Motor Cars [2008] BLR 285
Vasiliou v Hajigeorgiou [2010] EWCA Civ 1475
Wayne Tank and Pump Co Ltd v Employers Liability Assurance Corporation Ltd [1974] 1 QB 57
West of England Fire Insurance v Isaacs [1896] 2 QB 377
Western Trading Ltd v Great Lakes Reinsurance (UK) plc [2015] EWHC 103 (QB)
Wheat v E Lacon & Co Ltd [1966] 1 All ER 582
William Jackson & Sons Ltd v Oughtred & Harrison (Insurance) Ltd [2002] Lloyd’s Rep IR 230
Yorkshire Insurance Co Ltd v Nisbet Shipping Co Ltd [1962] 2 QB 330
Youell v Bland Welch & Co Ltd (The “Superhulls Cover” Case) (No. 2) [1990] 2 Lloyd’s Rep 431
Young v Sun Alliance and London Insurance Ltd [1976] All ER 561

List of Statutes

Statute Chapter
Companies Act 2006
Contracts (Rights of Third Parties) Act 1999
Energy Act 1983
Enterprise Act 2016
Insurance Act 2015
Life Assurance Act 1774
Limitation Act 1939
Marine Insurance Act 1906
Nuclear Installation Acts 1965 and 1969
Nuclear Installations (Liability for Damage) Order 2011 and 2015
Public Order Act 1986
Riot (Damages) Act 1886


Title: Walmsley on Business Interruption Insurance, 2nd Edition
Edition: Second
Number of Pages: 349
Product Code: WS1443K
ISBN: ISBN 13: 978-1-85609-443-6 (9781856094436), ISBN 10: 1-85609-443-X (185609443X)
Published Date: September 2016
Binding Format: Hardback
Book Height: 240 mm
Book Width: 160 mm
Book Spine: 30 mm
Weight: 1.40 kg

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