Business Interruption Insurance

What is it?

From your family and employees to customers and suppliers, there are a lot of people who depend on your business opening its doors each day. Business interruption insurance is designed to protect you – and them – from losses caused by an insured event or incident that forces you to close your premises for an extended period of time. It effectively returns your business to the same financial position it was in before the event occurred, allowing the quickest possible resumption of normal business.

A study by the Insurance Council of Australia found that of the 40% of businesses that don’t have adequate insurance cover, around 90% do not survive a major loss.

What it covers?

It’s important to remember not all Business Interruption policy wordings are the same. Given inadequate cover could be crippling to you and your business, it’s vital to get it right. In particular, there are a variety of wordings and basis of settlements ranging from Gross Profit, Gross Revenue and Instant Profits. 

When deciding the best basis of cover for your business, things to consider include: 

  • Indemnity Period – How long do you need the cover for? How long will it take your business to get back to pre-loss trading figures? 
  • Claims Preparation Fees – How much is going to be sufficient for your business to help you with a claims process? 
  • Payroll – Do you insure it, how much of it, and for what period of time? 
  • What happens in the event of a claim if your business is subject to seasonal fluctuations or economic cycles? 
  • Are you covered when your business is in growth mode? 
  • What happens if one of your customers or suppliers suffers damage from a significant peril and your business suffers as a result? Would you be covered? 
  • Uninsured Working Expenses – Are you paying for unnecessary cover that relates to expenses that would not exist in the event of a claim?

When your business is faced with a catastrophe the last thing you need to be worrying about is your insurance. Contact one of our Authorised Representatives to assist with your Business Interruption Insurance requirements today. 

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