Do you need Business Interruption insurance?

If a fire causes your facility to be temporarily unusable, what would you do next?  Would your business be able to pay utilities, wages or any other standing charges without any income?  It could take months before the damaged property is rebuilt and stock, machinery and equipment are repaired or replaced.  Ideally, you would move to a temporary location while your permanent place of business is being repaired.  Yet, traditional Property Insurance does not cover this move or a loss of income when a business must temporarily close.  With Business Interruption Insurance, this setback can be minimised by simply adding this cover to your Property Insurance policy.

What can be included in a Business Interruption policy?

  • Compensation for lost income if you have to vacate its premises as a result of disaster-related damage covered under a Property Insurance policy
  • Compensation for the gross profits that would have been earned based on previous financial records, had the major loss/peril not occurred
  • Covers operating expenses, such as utilities, that must be paid even though business temporarily ceased
  • Covers the increased cost of working, including expenses of operating in a temporary location while repairs to the permanent location are completed

Insurance experts estimate that Business Interruption Insurance is one of the most, if not the most, valuable cover available, yet it is often overlooked by business owners.  Since Property Insurance only covers the cost of physical loss or damage and contents of a business in the event of a disaster, Business Interruption cover is invaluable in covering the loss of income while the permanent business location is being repaired.

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Tags: Business, Insurance cover, Small business and start ups

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