Business Interruption Insurance

Business interruption insurance covers you for any loss of income if your business has suffered from an unexpected event or disaster (Source: Wikipedia). Perhaps it is due to a fire, flood or vandalism or one of your most essential machines has suddenly stopped working, your insurance is intended to put your business in the same trading position it was before the event occurred.

The business interruption period is determined by your insurer and typically starts when the peril occurred until the damaged property is physically repaired and operations are back to normal.

Don't let a halt in operations put a halt on your finances. Keeping your business running smoothly requires careful planning and management, but sometimes you will be exposed to risks that are outside of your control. Telecommunications faults, severe weather conditions and power outages are amongst a growing list of perils that can cause your business to grind to a halt. For instance, a burst water pipe can flood out your entire office and take several weeks or months to dry out, causing major disruption to your workflow. If your company is out of action, you need to think about how you are going to keep the relationship with your clients, suppliers and continue to pay your staff.

Be Wiser provides a range of feature-packed products from a number of leading providers to protect your business should the worst happen. This type of insurance is available for all kinds of businesses, whether manufacturing or financial services, and we cater to companies of all sizes. Our experienced advisors are on hand to help you tailor insurance cover to suit the specific requirements of your organisation. Why not give us a call now for a no-obligation quote?

What Can You Claim For?

Businesses can claim for any shortfall in profits during the period of interruption (known as the period of restoration) and this usually lasts for up to 12 months. The amount you are allowed to claim must be directly as a result of the recent event and will be pre-tax profits (Source: Association of British Insurers). Businesses will be required to show proof of their previous monthly profits through a financial statement and the compensation they receive will be based on these figures.

Companies can also receive compensation to contribute towards any additional costs or ‘extra expenses’ involved to get their business back into its original position. This may include building costs, maintenance fees, paying for positive PR, accountancy and legal fees too.

What Cover is Available?

Buildings Insurance: This will pay to repair and replace any damage to your office after a flood, fire or vandalism. The benefit of having this combined with a business interruption policy is that it is not only fixing the physical damage to any desks, walls and floors, you are able to be reimbursed for the impact it has to your ever day running of your business. If your offices are damaged and it stops people working at their desks or staff using machines, this cover enables you to receive compensation for any profits you may has lost during this time.

Contents Insurance: Any valuable contents you have in your office can be replaced or the cost to replace them can be reimbursed provided that they are insured. This includes any valuable items, data, documents and intellectual property.

Equipment & Stock: For any machinery or computers you use for business that are damaged due to an unexpected event, your insurance can replace these so you can get back on your feet. Business interruption insurance is therefore ideal for companies that have a lot of vital machinery whether it is computer servers or even for manufacturing. It is also recommended for companies that keep and sell a lot products and stock in-house.

Employers' Liability: This is insurance dedicated specifically to assisting your staff in hard times. Whether an employee has been physically injured by the unexpected event or they have lost income because they cannot work during the office restoration, they can be compensated by your employers liability insurance.

Legal Assistance: If the damage caused was a result of another party, you may wish to seek legal advice in order to receive compensation. Similarly, if the damage caused to your company has had a negative impact on other parties, you may find yourself in a legal battle. With legal assistance cover, your insurance will contribute towards any fees you incur from lawyers, being in court, lost income or lawsuits.

Temporary Location: If the damage to your premises is so severe, your cover can pay towards a temporary location whilst it is being restored. It may be a matter of fixing some windows and office space which will take a few weeks or months. In some cases, you can be denied access to your office because of Government, police or military authority such as investigating a crime scene or being in dangerous area.

Fixed Costs: By owning an office, you will still have some fixed costs to pay even if your premises are out of use, including rent, service charges and more. These fees can also be recovered through your insurance during the time that your business is out of action.

Contingent Business Interruption: This type of cover is not for your own business, but other companies that you work closely with and rely on to pursue your business activity. This could be suppliers, customers or even a ‘leader property’ where you could be based in a shopping centre or giant block of offices and rely on their infrastructure and flow of customers. If your partner is disrupted, it will have a negative impact on your business too, so you can acquire insurance to protect against this happening. (Source: Marsh)

Service Interruption: If you require various services to carry out your business such as electricity, water, steam or telephones, you can purchase cover if you are unable to access these accordingly. For instance, a call centre with a telecommunications fault will not be able to run successfully and this is where service interruption would be used.

Can I add Business Interruption to my existing policy?

Yes, business interruption insurance can be automatically included in your business insurance policy, depending on the insurer we introduce you to. Otherwise, it can be added as an extra to your contents and buildings insurance, as well as other types of liability insurance.

Contact us today on 0333 999 0802 to speak to one of our dedicated advisors. We work with a number of insurers and are able to tailor policies according to your business needs. In fact, we can also use more than one insurer on a policy so that you can get the best of both worlds and get the maximum cover for the most affordable price.

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Common things that can interrupt your business include:

  • Damage to your machines
  • Unexpected weather
  • Fire
  • Floods from burst pipes, water leaks or heavy rain
  • Power cuts
  • Legal battles
  • Bad PR