Business Interruption Insurance
If your business suffered a serious loss, perhaps a fire, could your business continue to operate? Even if the loss was small it could have a serious impact on your business continuity.
You will have staff costs, standing charges and possibly the bank as well as suppliers who all want paying still, could your business survive such a loss?
Business Interruption Insurance is essential cover to put you back in the same position as you were before the loss happened.
Whatever your business, whether you are a manufacturer, a shopkeeper or a charity, its vitally important that if your business cannot operate then you need the necessary income into the business to keep you going whilst your business premises are repaired, rebuilt or machinery replaced.
Business Interruption Insurance, getting it right, it’s essential.
Understanding Business Interruption Insurance.
This cover can be quite complex to understand and like any business your requirements will be different to the next. Whilst every business is different there are various points within Business Interruption that won’t change.
The cover provided will always have to follow an insured loss on the property section of your policy, this means, Fire, Theft, Flood, Storm etc. It’s not about customers going bust on you or illness of a director, there are specific covers available for these scenario’s
For businesses that have a Gross Profit, if you are asked for this figure it’s going to be the amount before all the operating costs are taken into account, not the bit left at the end of the year, this is usually your Net Profit
How long are insurers going to pay
You have an Indemnity Period, this starts at 12 months but there is an option of 18 Months, 24 Months and 36 Months, this is period of time that the insurer will continue to pay. Its very important that this is correct.
Business Interruption insurance, its more than just about YOU!
Its more than just what happens at your own premises, things can go wrong elsewhere that can affect your business
You can’t access your business premises due to Fire or Flood in neighboring property
Loss at your suppliers premises – they can’t supply you.
Loss at your customers premises which stops your manufacture and you can’t deliver.
Items in transit, you have to reorder or remake.
Can’t access your contract site due to an insured peril causing an interruption.
Your business is very successful because you have a major retailer operating close by, your business succeeds because they are there, customers come to see them not you but you benefit from there location. They have a loss which closes their business, your business suffers because of this. This is called Loss of attraction and therefore a potential interruption to your business!
Overseas suppliers, you are reliant on them to supply you, they have a major fire loss at their premises, what happens to your business?
There are of course more depending on your business type, we guess we are probably boring you now so pick up the phone and call us!
Contingency planning can reduce losses, but make sure you have sufficient Business Interruption insurance cover!
Business Interruption Insurance really is essential for your business
Without the cover the longevity of your business can be seriously compromised, it’s not a consideration about whether you should have the cover, there should be absolutely no question about it at all.The only question you should be asking is what do I have to do to make sure I have the correct amount of cover.