Why business interruption insurance?
Regardless of the sector you operate in, there are a number of essential types of insurance that form the main cover protecting your company against potential losses. One of these essential types of cover is business interruption insurance.
Business interruption (BI) insurance aims at protecting your business against financial losses caused by an interruption of your normal course of business. For example, your company may have to halt operations either completely or in part as a result of an unexpected event. Your losses will be covered by a successful claim under your BI policy in such an event.
Examples of Losses Covered
These losses are financial ones arising both from the loss of income during the unexpected interruption and from the continuation of expenses that have to be paid such as payroll, loan repayments and other bills that you have to pay regardless of the fact that your business is not operating. Worth mentioning is that initially there has to be an insured incident (i.e. not excluded by the property damage policy or section) that causes interruption to or interference with the business during the indemnity period. If the business interruption was caused by a theft of stock preventing the business from operating normally, the BI policy may only respond after a successful claim under the contents policy.
Typical interruptions to business affecting its ability to operate normally include such events as:
- Utilities services interruption such as power, water or telecommunications
- Substantial damages to the premises such that the building needs to be rebuilt or extensively repaired
- Customer or supplier failures leaving you in a position where you cannot sell your product or buy required materials
- Infectious disease or vermin/insect infestation that requires closure of your premises or even wider area due to health and safety grounds
- Inability to enter your building, or denial of access to your premises
Most policies will include only some of the elements of the above list of events – either as standard or as an additional extension. Some events may not be included depending on the type of risk or your business as well as insurers’ appetite for such exposure. Some examples of how financial support could be obtained from a successful claim under a BI policy include:
- Failure of your broadband provider to supply you with access to the internet stopping your software development firm from being able to work during several hours.
- Your restaurant unable to operate due to a massive flooding in your part of the city preventing your clients from accessing you.
- An emergency and rescue operation taking place in your part of the country that forces you to shut the manufacturing operation due to interrupted supplies.
What is the typical cost of a business interruption cover?
Given the diverse nature of businesses and the risks they are exposed to even within the same industry, indicative pricing is only possible once an individual assessment of your particular business situation including your industry, the breadth of cover you are looking for, your physical location and amount of potential losses.
It is advisable to obtain quotes from more than one provider and compare them so that you get the right deal for your individual circumstances. This is exactly what our insurance broking service can do for you saving you both time and money. Call 0203 797 1287 or send us an enquiry below today for your individual business interruption insurance quotation.