Business Interruption Insurance Explained

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Should a disaster happen, your business may need financial support to keep things operating as usual. This is where Business Interruption insurance comes in – a policy designed to give your business the help it needs to carry on regardless.

The impact a disaster can have on a business can be varied:

  • Lost sales or enquiries
  • Damaged stock and equipment
  • Increased cost of production
  • Reduced turnover
  • Relocation costs

Often it isn’t the direct result of the initial loss or damage that causes a company to go bust, it is the on-going costs of keeping the business afloat. Business Interruption insurance is there to help businesses cope with these costs, and weather out the storm until profits are back up.

Things that can be covered with Business Interruption Insurance:

  • Lost profits
  • Operating expenses
  • Costs of alternative accommodation
  • Expenses that allow continued operation
  • Training costs in the event that equipment is replaced
  • Financial impact of a suppliers or customers business being disrupted
  • Repairs and replacement

A key part of insuring against disruption or interruption is to make a Business Continuity Plan. This enables businesses to identify all the risks that could interrupt a business, and create a plan of action should any of them happen. The most common cause for disruption is fire or flood, but the plan should also include factors such as the death of a key team member.

For more information about Business Interruption Insurance, please give us a call!