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.