Unfortunately it is harsh reality that many businesses fail to recover from a major event such as fire, storm or earthquake as overheads (such as wages and rent) continue even though the business may be unable to trade.

This cover is so important to any business because the whole aim of Business Interruption insurance is to restore the business to the same financial position as if the loss had not occurred.  Property is insured against loss or damage so that funds are provided to pay for the repair or replacement of the ‘Bricks and Mortar.’

We have all too often hear people say:

  • ‘Well it hasn’t happened before!’
  • ‘This building will never flood or catch fire!’
  • ‘Well only a portion of the business will be affected, we would never lose everything all in one hit!’

Business interruption insurance can be defined as coverage that replaces business income lost as a result of an event that interrupts the operations of the business, such as fire or a natural disaster.

Business interruption insurance is not sold as a separate policy, but is either added to a property/casualty policy or included in a comprehensive package policy.

Business interruption policies invariably only insure actual loss or damage sustained and do not cover incidents where damage has not occurred. The loss adjustment formula in a standard BI claim is still dictated by the original sums insured, basis of coverage and the indemnity period selected. So it is critical to get these correct!

Click here to find out about business interruption insurance for your business.