Why do I need Business interruption insurance?
If a crisis beyond your control was to hit your business, be it a storm, flood or fire, would your business be able to survive the upheaval? Many businesses simply don’t have the necessary financial resources to continue trading should the worst happen, and may at some point have to sell or close due to the pressures of staff wages, business rents and other on-going expenses.
Business Interruption insurance aims to help you weather the storm and put your business back in the same trading position it was in before the event occurred.
What is Business interruption insurance
Business interruption insurance covers you for loss of income during periods when you cannot carry out business as usual due to an unexpected event.
Business interruption insurance can be a stand alone policy, but cover is normally linked to a property insurance policy or a comprehensive business insurance policy.
Whilst buildings insurance would look after the resulting damage of say, a major water leak or a flood, the impact of such an event might leave the business unable to trade & complete orders.
This is where Business Interruption steps in to cover loss in revenue and associated costs.
Most policies will cover business interruption as a result of:
- damage caused to your premises or equipment by fire, storm or flooding
- the breakdown of essential equipment
Some policies will also cover business interruption as a result of:
- people not being able to get into your business premises
- damage occurring at the premises of a supplier or customer
Specialist policies, which are sold separately, are available to insure your business’s computers against viruses, hackers and other cyber risks.
Making a claim
If you make a claim business interruption insurance can compensate you for:
- any (pre-tax) shortfall in profits
- temporary relocation costs
- any increased costs of running your business as a result of the event, for example any extra accountants’ fees you might have to pay
What do I do next
Give us a call.
We can help you consider your vulnerabilities in your current policy covers, and also help you develop a Business Continuity Plan which can play a vital role in helping you understand and manage any risk to your business operations in the event of a claim.
