What can Business Interruption Insurance help cover?

In the event of a valid claim, there are a variety of ways that Business Interruption Insurance can help cover costs to your business that may not be covered by your other policies. To give a brief overview of the possibilities that a business interruption policy could include: Cover for revenue you would take if the business had remained open Rent, lease or mortgage payments for the affected premises you operate from Applicable loan payments that are required in the affected period Taxes Payroll for employees Cost to relocate if you are forced to move operations, either permanently or temporarily whilst your building is repaired Training costs to teach employees new systems or replacement machinery that was damaged or destroyed in the event.

Business Interruption Insurance

Protecting against the unexpected is key to the survival of your business.

Business Interruption Insurance is designed to enable you to continue to pay the bills and retain customers should something happen that results in a loss of income.

What does Business Interruption Insurance cover?

Protect against the unexpected
Business Interruption Insurance provides financial protection in the event of disasters such as fire, flood or a major theft that prevent you from trading or operating.

Major damage to your business premises could leave you unable to operate until repairs are made. Business Interruption Insurance will usually cover your lost income for up to 12 months as well as additional costs such as the rent of alternative premises.

The event may not have happened on your own property. For example, a fire in a neighbouring warehouse or escape of water from an office above your company could leave your premises severely damaged and unusable. If you’re then unable to meet your customers orders and they go elsewhere, the income to your business will suffer as a result of the incident.

Business interruption cover can also include less catastrophic events such as the failure of power, water, telecoms or internet services for more than 24 hours due to damage to the service provider’s own premises or networks (unless by flood or earth movement).

Business Interruption Insurance can help with:

Damage to premises
Most policies will cover damage to your premises arising from flooding, fire or a storm as well as the resulting breakdown of essential equipment or machinery.
Loss of revenue and profit
Cover can help with loss of income whilst your business is unable to trade and help with ongoing costs such as rent, employee salaries and other business overheads.
Increased costs Just when your income suffers a hit due to a disaster, your business costs may well increase. For example, you may need to hire replacement equipment or even rent alternative premises to continue trading whilst repairs are carried out.
Indirect interruption Cover can also include damage that happens to a supplier or customer resulting in a direct impact on your business. Another feature which can be included is disruption to your business due to customers or suppliers not being able to get into your premises.

Business Interruption Insurance questions

A disaster such as flood, fire or major theft can happen to any business – large or small and of any type. If such an event could leave your business unable to operate, then you should consider Business Interruption Insurance.

There are many factors to take into account when considering the level of cover you need. Damage to your premises or equipment could take months – or even years to recover from. You also need to include additional costs such as renting alternative premises or equipment. The financial impact needs to be carefully considered and discussed with your insurance broker to calculate an appropriate level of cover.

Business Interruption Insurance has an indemnity period – the length of time that you are covered for following an incident. For example, a 12 month indemnity period would mean that if your premises was damaged and needed significant repairs, your Business Interruption Insurance would provide cover for that 12 month period.

Causes of business interruption vary depending on the nature of the company and it’s locations. Business Interruption Insurance claims most often concern fire or flood damage, which are not only devastating events that stop trading but also among the causes that will cause the longest business downtime.

In the event of a valid claim, there are a variety of ways that Business Interruption Insurance can help cover costs to your business that may not be covered by your other policies. To give a brief overview of the possibilities that a business interruption policy could include:

Cover for revenue you would take if the business had remained open
Rent, lease or mortgage payments for the affected premises you operate from
Applicable loan payments that are required in the affected period
Taxes
Payroll for employees
Cost to relocate if you are forced to move operations, either permanently or temporarily whilst your building is repaired
Training costs to teach employees new systems or replacement machinery that was damaged or destroyed in the event.

The cost of Business Interruption Insurance can vary greatly, as can the amount of cover or features required included under the policy. At FOCUS, we take the time to understand your needs and the requirements of your business. This then enables us to advise on the most appropriate solution for you. In terms of aspects that will affect the cost of a policy:

The industry your business operates in
Number of employees
Amount of cover required

In many cases, business interruption policies include flood cover at some level. However, the cover provided will depend on a number of factors – including the location of your business and the flood risk and flooding history in the area.

If you have experienced flooding at your business previously, or are at high risk then cover can be more difficult to obtain. This could mean that, in the event of a flood, you may only be covered to a certain level.

For a more assured flood risk solution, we offer flood risk insurance from FloodFlash, which gives a guaranteed payout if a pre-agreed depth of flooding has been exceeded.

Protecting your business

When thinking about disasters such as fire and flood, we often only consider the physical impact. The damage to buildings, furniture, equipment etc is usually covered by your business contents insurance policy. However, replacing these items is only part of the recovery process – and often the simplest.

Dealing with the financial consequences can be significantly harder – and that’s where Business Interruption Insurance can be vital. Often one of the most misunderstood – and therefore overlooked business insurance policies is business interruption cover.

Without this valuable protection in place, an event that damages or destroys some or all of your company’s property and contents could easily lead to the financial devastation of your business.

The team at FOCUS is available to guide you through the protection you need for your business. Our approach is to get to know you and your business and help you identify your specific insurance risks. We’ll assess and then provide solutions to meet your requirements. We’re here to help as your business grows and changes and adapt your cover accordingly.

We’re here to talk to our clients in whichever way suits you – whether it be face to face, via web-meeting or on the telephone.

To find out how we can help your business, speak to our friendly team of experts.

Business Interruption Insurance

What does Business Interruption Insurance cover?

Business Interruption Insurance questions

Protecting your business

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