Memorandum submitted by the Association
of British Insurers
I understand that at a recent hearing of the
Committee, it was asserted by some witnesses that it was possible
for a company owning a pub to take out insurance against the risk
of a tenant defaulting on the rent.
There is no insurance which covers default in
the event of business failure or abandonment. The only circumstances
in which insurance covers rent payments is where there is damage
to the premises, for example from fire or flood—in other
words, as part of or relating to property insurance where it is
hysically impossible to continue trading.
I hope that this clarifies the position.
5 March 2009
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