For many businesses, it can be difficult to predict the financial implications a major interruption would have on their balance sheet.
The potential consequences can be more devastating to a business than the loss of any physical assets.
When a business suffers damage, it is almost certain that two things will happen:
- The day-to-day running costs of the business will increase
- The ability to earn revenue is diminished
This is where Business Interruption insurance steps in. It will alleviate the financial headaches whilst the business attempts to recover following the major incident.
Business Interruption cover will indemnify your lost income and cover fixed costs to ensure you can continue to recover. Consideration should be given to your indemnity period (the agreed time period for which your insurance company will continue to indemnify you), if this is too short, your business may not be able to fully recover.
A Business Interruption policy can benefit from a variety of additional extensions. Careful consideration should be given to the extensions you may need.
Whether your business operates from a single site or you have operations across the globe, our team has the knowledge and experience to ensure your Business Interruption policy is fit for purpose.
Business Interruption (BI) insurance is required following a material damage loss affecting your business to assist you with regaining the predicted pre-loss trading position, had the loss not occurred. The cover aims to maintain the turnover of the business during the chosen indemnity period so that trading is not unduly affected.
Regardless of the size of your business, if a material damage loss occurs, it is highly likely that you will require additional support in ensuring that your turnover is maintained. This insurance is there to protect you from a situation whereby the business potentially suffers so badly that you are no longer able to trade or worse, you fall into liquidation.
You will need to consider how long it will take following the first day of the loss for your business to fully get back up and running and return to the trading position it would have been in had the loss never occurred. All Business Interruption cover will cease at the point the business is fully recovered or on the expiry of the indemnity period, whichever happens first. If this period is too short, you will not be allowing for the business to fully recover and the future of the business could be at risk.
We can provide you with different lengths of indemnity periods to consider the relevant premiums payable. Just some of the factors you will need to consider are: rebuilding time, planning consents and enquiries, regaining lost market share and customer base, retraining staff and lead time for replacement machinery/plant.