June 1, 2020
THE NEED FOR BUSINESS INTERRUPTION INSURANCE COVERAGE IN NIGERIA IN THE FACE OF THE RECENT COVID-19 PANDEMIC
BY Chibueze Muobuikwu (Senior Associate)
INTRODUCTION:
The outbreak of corona virus (COVID-19) pandemic has no doubt, occasioned an unprecedented human and economic crisis across the globe. The resultant lockdown and abrupt shutdown of major economic activities in the world has apparently given rise to several business disruptions and economic losses across nations including Nigeria.1 According to Kristalina Georgieva, Managing Director of International Monetary Fund (IMF), the economic effect of the pandemic would result in “a recession at least as bad as during the Global Financial Crisis or worse”, and this is because the world is currently experiencing the most difficult economic situation since World War-II.2
The consequence of the foregoing crisis is that many organizations would be seeking for ways to ameliorate the effect of the pandemic on their businesses. One of the options open to some businesses is to have recourse to their insurance policies, and the most significant insurance coverage which business owners would resort to is the business interruption insurance coverage. This write up briefly examines the concept of business interruption coverage; the extent to which such insurance claims may be potent for the insured business owners in the face of the recent pandemic, and the need to broaden the Nigerian insurance legal framework to include business interruption insurance.
BUSINESS INTERRUPTION INSURANCE COVERAGE:
Business interruption insurance has been defined by Black’s Law Dictionary as an agreement to protect against one or more kinds of loss from the interruption of an ongoing business, such as loss of profits while the business is shut down to repair fire damage.
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