Business Interruption Insurance
What is Business Interruption insurance?
Business Interruption insurance is an invaluable cover that will protect your business from loss of income following an unexpected event which results in a temporary disruption to your business.
You may need to close your business for a short period of time or reduce your usual operating levels as you recover from the incident. A Business Interruption insurance policy will cover any consequential financial losses that your business may sustain should operations need to be suspended, whilst you rebuild or relocate, and get back up and running again.
A robust policy will provide funds to cover financial losses as a direct result of a ‘policy stated’ business interruption, such as:
- Additional staff costs
- Loss of revenue
- Loss of rental income
- Any rental or mortgage fees
Business Interruption insurance is a perfect tool to include in your risk management plans. It will help to secure the future of your business in the face of a disaster by covering your ongoing operational costs; helping you to pay your bills, retain your staff and maintain your supplier and client relationships.
Whilst the building itself and the contents within it are usually covered with buildings and contents cover, your operational costs and expected incomes are not. Having insurance protection in place to allow you to recover from a disaster may be the difference between business survival and going under.
An event that triggers a Business Interruption insurance claim is typically caused by a disaster such as a fire or flood, but your policy can also be written to cover supplier failure, theft, storms, disease and more. Your policy should be created to include the covers that are vital to your business.
Who should have Business Interruption cover? If you have a business that uses specialist equipment, keep large volumes of stock that are not quick to replace, or if you wouldn’t be able to set up your operation from another location straight away – we recommend you consider Business Interruption insurance.
The basis of cover Business Interruption can be written on falls into three categories (including increased cost of working), and the most suitable one for your business will depend on your particular business set up. Click on Business Interruption Insurance categories to find out more.
Our blog delves deeper into the benefits of Business Interruption Insurance, looking at damage and non-damage scenarios that may trigger a claim.
We can help you arrange a comprehensive Business Interruption Insurance policy that will protect your organisation if an unexpected event means that you are unable to trade as usual. Together we’ll look at scenarios that may include relocation, more or temporary staff and income that would be affected, to make sure that the cover provided will be just what you need.
Our expert advisers will provide guidance on the best Business Interruption plan for your business – call 01480 272727 or send us an email at enquiries@barnesinsurancebroker.co.uk and we’ll be in touch.
For more answers to your Frequently Asked Questions on Business Interruption Insurance and why you should consider it as part of your risk management strategy see below.
Business Interruption Insurance - We answer your Frequently Asked Questions
Why do I need Business Interruption Insurance?
A Business Interruption insurance policy will protect against the financial loss suffered as the result of claim. It covers the income that you would have received had the incident not occurred.
This means your business will be able to cover operational costs whilst you rebuild or repair and could be the difference between a long-term future or none at all.
Better to be prepared for the worst than discover after an event that a Business Interruption policy would have saved your business.
Who should have Business Interruption Insurance?
If your business operates from a large premises, relies on specialist machinery, requires you to warehouse volumes of stock and you know that a disaster would take a substantial period of time to recover from, then Business Interruption insurance should be included as part of your risk management strategy.
Specialist machinery can take months to be replaced, as can stock, so ensuring that you are covered for your loss of income whilst things are remedied will bring reassurance of business survival.
If you can set up your business with a laptop and phone the very next day, with minimal disruption to staff, customers and suppliers, then you probably don’t need it.
What are the benefits of Business Interruption Insurance?
Business Interruption insurance provides financial security for your business if a significant event means that you have to temporarily close or reduce your operations. It covers your lost income as a result of the impact of the disaster. This means that your business will be able to navigate through the disaster and get back to a normal operating status as soon as possible, despite the unexpected event.
It will cover:
- Additional staff costs
- Loss of revenue
- Loss of rental income
- Any rental or mortgage fees
It will also help you to buy more stock or move to an alternative site in the interim.
For some businesses Business Interruption insurance can be the difference between staying afloat and going under.
How much Business Interruption Insurance cover do I need?
This will depend on your unique situation and will be affected by numerous factors including the size of your organisation, the number of staff you have, if you would need to employ additional temporary staff to recover from the event, or if you might need to temporarily relocate.
Recommended cover would depend on your ability to recover following the disaster. It’s important to make sure that you consider all the costs that you might need to cover, because if the financial losses are above your cover limit, you will need to meet the shortfall.
There are three main categories that a Business Interruption policy can be written on. The type of policy you need will depend on the type of business that you operate. You can find out more about the Business Interruption insurance categories here.
As a specialist and independent commercial broker, we can help you to assess your needs by carrying out a full risk assessment together and creating an outline recovery plan. This will help you to understand the extent of the cover you will need in the event of a business interruption incident.
Speak to an expert advisor about your particular requirements on 01480 272727 or send us an email at enquiries@barnesinsurancebroker.co.uk
How can I buy Business Interruption Insurance?
Due to complexity of calculating the level of cover required, we recommend that you engage a specialist broker to help you arrange your Business Interruption insurance.
We have a wealth of experience in arranging Business Interruption cover for a wide variety of organisations and will ensure that your policy is exactly what you need to help you navigate a disaster successfully. We will advise on the right cover basis for your particular set up and include an increased cost of working extension if you need it.
Our expert advisers will look at your potential exposure to risk and work with you to formulate a reliable plan to mitigate it. And we’re on hand, as your risk management partner, to answer your questions, provide guidance when circumstances change, or if you need risk management advice.
