Pub Companies - Business and Enterprise Committee Contents

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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