Business Interruption Insurance, also known as Consequential Loss Insurance covers the loss of income your business may experience due to an unexpected event, such as fire, flooding, or other disasters.
The primary objective of this insurance is to restore your business to the same financial position it was in prior to the incident, helping reduce the impact on operations and profitability.
Business interruption cover can be arranged in two main ways:
Approximately 40% of businesses never reopen after a significant disaster, making proactive protection essential. Business Interruption insurance is critical for maintaining financial stability during recovery. Tailored coverage can protect various revenue streams, such as:
Assess which revenue types are most relevant to ensure adequate coverage and resilience against disruptions for your business. We recommend discussing your options with your insurance broker to ensure that your policy provides comprehensive protection tailored to your needs.
Business Interruption Insurance covers loss of income due to damage to premises, equipment, or stock from events like fire or flooding. Typically, Flood claims are often triggered by burst pipes or water tank failures rather than natural floods. The policy compensates for lost income while repairs are made, which can take months or even years, especially after severe damage.
The Indemnity Period is the maximum duration insurers reimburse losses, starting from the time of the incident until business revenue recovers to pre-loss levels. Selecting the right period requires considering worst-case scenarios, such as rebuilding after a major catastrophe. Ensure the Indemnity Period allows sufficient time for repairs, redesign, and full operational restoration, protecting your business from extended disruptions. Key considerations may include:
It is essential to consider the scale of your operations and the risks associated with your business when determining the right level of Business Interruption coverage. For example, businesses in the removal and storage sectors may need to cover both storage and transit revenue, while self-storage operators should consider coverage based on Gross Revenue, as the core function of their business would cease in the event of a major loss.
Please get in touch today if you’re looking for something more specialist, and our expert team will be able to help.
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