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.
Business interruption – Covering the loss of income

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.

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I had tried lots of other brokers but some didn’t bother to get back to me, and others couldn’t offer cover for our property. I found your service very professional and efficient. It is nice to speak with an individual person rather than a large company of telesales people!

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My situation has been complicated by a previous subsidence claim, but Alastair has gone above and beyond to help me find appropriate cover.
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Alastair has sorted out a number of insurances for us with total professionalism and efficiency. He has dealt with our car and home insurance and in all cases he has come up with exactly what we wanted, balancing cost with cover and also some additional benefits we had not considered. I would thoroughly…

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Alastair has sorted out a number of insurances for us with total professionalism and efficiency. He has dealt with our car and home insurance and in all cases he has come up with exactly what we wanted, balancing cost with cover and also some additional benefits we had not considered. I would thoroughly recommend using Alastair for all your insurance needs.

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Alastair provides a professional and personal insurance service. He really got to know me and my business and helped me get a better understanding of which cover I should have in place. Would definitely recommend talking to Alastair if your insurance is up for renewal

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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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