A rise in corporate insolvencies in December indicates that the effect of the Covid-19 pandemic on businesses is beginning to show.
Corporate insolvencies were up by 9% in December 2020, compared to December 2019. This makes December the first month in 2020 since the beginning of the first UK lockdown to see a rise in corporate insolvencies from the corresponding month in 2019.
December 2020 also marked a 38% increase in the number of corporate insolvencies from November 2020.
We have previously seen the government extend their support for businesses under the Corporate Insolvency and Governance Act 2020, as explored in our previous article. The restrictions on serving statutory demands and winding-up petitions on companies have further been extended from 31 December 2020 until 31 March 2021. Despite this continued support, December’s corporate insolvency numbers have increased. Once this support is withdrawn, numbers are sure to rise further.
On a positive note, businesses can claim under their business interruption insurance policies, as confirmed in Friday’s judgment in the Supreme Court case of The Financial Conduct Authority v Arch and Others. Perhaps successful claims under these policies will help to curb the onset of insolvency for those policyholders and, in turn, the rising number of corporate insolvencies.
If you are worried about the solvency of your company, or are looking to claim under your business interruption insurance policy, please get in touch with our expert insolvency department by calling 0845 287 0939 or you can contact us by email and a member of the team will get in touch with you.