Business interruption insurance
When considering business interruption insurance ask yourself one simple question. How long could you survive with no money coming in? Every business is unique, so at Bollington we will expertly assess your risk levels and advise whether business interruption cover is a worthwhile addition to your business insurance package – and which of the many types of policy is most suitable. Rest assured that we will never recommend business interruption cover unless it is right for your business.
Why you may need loss of income insurance
Business Interruption insurance provides protection against a business being temporarily closed or curtailed because of unexpected incidents such as fire and flood. Some policies can also cover you for a major equipment breakdown. You may believe that building insurance is sufficient, but this can only cover the cost of repair or remedial work if your premises are unusable for a while. Only specialist business interruption insurance can provide cover for loss of income if you are unable to trade, or cannot trade normally, or need alternative premises.
Business interruption is more likely than you may expect – and can last a lot longer
The problem causing you to lose income may not even be with your own premises. Perhaps damage to a neighbouring building prevents access to yours. Damage to a supplier’s premises can also have a knock-on effect on your income. And please bear in mind that flooding isn’t always caused by extreme weather; burst pipes and collapsing rooftop water tanks are statistically more likely. Furthermore, a badly flooded building can take up to six months to dry out, with specialist equipment taking even longer to replace. That’s a long time for customers and key staff to wait, and so there’s a strong chance they’ll move on, costing you more income in the long term.
What your business interruption policy can include
• Business advisers/consultants
• Full Business Interruption – covers loss of ‘gross profit’ following a business interruption or loss of turnover
• Increased Cost of Working (ICOW) is suitable for businesses that can relocate and carry on with something close to business as usual, but may incur some extra costs in doing so
• Additional Increased Cost of Working can cover additional expenses such as contracting out work to continue serving customers, or the cost of extra advertising to inform customers about temporary premises or trading arrangements
How long for your indemnity period?
Business Interruption policies with different indemnity periods are available, ranging from 9 months to 48 months. The Bollington team will offer expert advice about this, and may advise a longer indemnity period to give you time to regain your market position, particularly if you depend on a small number of customers. Other factors that may demand a longer period include:
• If your business is seasonal
• The need to get planning permission before premises can be rebuilt
• Long lead times for replacing specialist equipment
Bollington is a leading, award-winning independent insurance broker with long experience in providing all types of business insurance. We will offer expert advice on the suitability of business interruption cover for your organisation as part of the complete package, and ensure that your premiums provide optimum value for money. Want to know more?