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Business Interruption insurance
If a fire caused your premises to be temporarily unusable, what would you do next? Would your business be able to pay utilities, wages or any other standing charges without income? It could take months before the damaged property is rebuilt and any 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. This setback can be minimised by adding business interruption (BI) insurance to your property and material damage insurance policy.
What can be included in a Business Interruption insurance policy?
- Compensation for lost income if you have to vacate your 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 loss or damage not occurred.
- Operating expenses, such as utilities, that must be paid even though business temporarily ceased.
- The increased cost of working, including expenses of operating in a temporary location while repairs to the permanent location are completed.
Considerations for Business Interruption insurance
- Business interruption insurance cannot be purchased on its own—it must be added to an existing insurance policy, such as a property or office insurance.
- Purchasers must also determine that the policy’s maximum indemnity period is sufficient to cover the amount of time it will take for the business to recover following a major loss. This includes considering the worst damage or disaster that the business could incur, estimating how long it will take to repair or replace buildings, machinery and stock, and determining the length of time it will take to recover customers and market share. Typical maximum indemnity periods range from 12 months to 36 months.
- Price of cover depends on the risk of disaster to the premises. This may depend on the business location, nature of the business and how easily the business could function at an alternate location.
Covering the loss of income
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, B.I cover is invaluable in covering the loss of income while the permanent business location is being repaired.
How to obtain a quotation from Alastair James Insurance Brokers
Requesting a quotation could not be easier. Either upload your current Policy Schedule or Renewal Notice. Alternatively you can request a call back at a specific time convenient to you, or telephone the office directly.
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PRIVATE CLIENT INSURANCE BROKERS
As private client insurance brokers, we have access to a variety of insurers and underwriting agencies who specialise in the insurance of high value homes, contents, valuables, performance cars and classic cars.
COMMERCIAL CLIENTS
Through our role as commercial insurance brokers we can provide comprehensive cover for individual company directors and sole traders through to small and medium sized enterprises and national organisations.
ABOUT ALASTAIR
Alastair established Alastair James Insurance Brokers Limited after nearly twenty years’ experience in the insurance industry, in both the Commercial and Private Clients sector.
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