There’s a misconception in business that contents and building policies will offer sufficient protection for your company should your base of operations fall victim to a small accident that stops operations for a time. Whilst having this sort of insurance cover is a vital part of safeguarding your business and will help you recover from incidents such as fire or flooding, they don’t take into account potential loss of income as a result of interruptions to your daily work. Worse still, the financial hit could be severe enough to lead to your business having to shut down entirely.
This is where Business Interruption Insurance comes in
Interruptions to your business’ operations can come in many shapes and sizes, with the most typical being as a result of a flood from a burst pipe or fire damage. Contents insurance can help to replace damaged equipment and buildings insurance will help to repair any damage to your office or warehouse, but neither offers protection from loss of income as a result of not being able to operate as a company. Business Interruption Insurance will offer the financial cover you require to potentially keep your business afloat during periods in which you’re unable to trade.
How does it work?
Typically, a business interruption policy comes into place after claims have been made against your contents or building insurance and helps to offset financial losses that you might experience whilst you aren’t operating. This could be anything from a loss of income from renting, the cost of additional staff or simply loss of revenue that you would be receiving were it not for an interruption.
Who is it for?
There are plenty of things to consider when it comes to deciding if Business Interruption service is suitable for you. The first thing to consider is how well your company could cope in a situation if you were unable to trade for a period of several weeks; are you well equipped financially to cover such losses and could you return to operations swiftly without too much concern? Should your stock be damaged in an accident, how quickly could you bounce back?
Take factors such as employee wages, repair costs and your total monthly outlay into your consideration, alongside issues such as your clients. Would you lose business due to your current clients needing to look elsewhere whilst you’re unable to operate? If the answer is yes, then Business Interruption could provide you with vital peace of mind should you experience an accident or problem that forced you to cease functioning for a period of time.