What is Business Interruption insurance?
If your business suffered an unexpected disruption, such as fire, flood, storm or a major supplier closes because of on of these events, how long would it take to get up and running again? And importantly how much would you lose along the way?
Business interruption insurance can help make sure your business keeps running smoothly after an unexpected event, by covering the turnover that is lost – so you can recover and rebuild.
Who should consider it?
For most business owners, there are ongoing expenses that you need to pay even if you’re not generating any revenue – like staff wages, supplier invoices, rent or loan repayments.
Business interruption insurance can get you through a temporary crisis by protecting your cashflow – so you can pay these expenses, and help ensure the future of your business.
What can it cover?
Business Interruption insurance can cover the loss of sales you would have made while your business is out of action – plus any extra costs you incur to stay open. The theory is “what would have the business done had the loss not occurred?”
Some examples of cover provide are Revenue/Income, Fixed Costs, Temporary Relocation, Extra expenses, claim preparation costs.
What usually isn’t covered?
Exclusions, the excess you need to pay and limits in the policy benefits can vary greatly depending on your insurer. In order to claim under a business interruption policy, the loss has to arise from damage to property (buildings, stock and contents) which was insured and the damage to property has to be claimable under that policy. Business interruption insurance is subject to the same exclusions as those covering buildings, stock and contents.
As with all insurance policies, the devil is in the detail…… so please do read the wording and schedules issued by your insurers. At Balance Advisors we are always here to help you navigate and review these policies so you have a good understanding of what your covered for. We are here to help!
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