| This is because many business owners wrongly think that other insurances will take care of everything if their operations are interrupted by events such as flooding, fires, or break-ins. However, while building and contents policies will usually put the initial damages right, they will not contribute to any of the consequential financial losses your business sustains from any interruption in trading. For a lot of businesses that don’t have business interruption cover, an event that causes some form of interruption can sometimes lead to a business termination. |
| What is an example of Business Interruption? While there are multiple different causes of BI, the most common are fire and flood. No one ever expects these disasters to ever strike their business but if they do, it’s often thought that other policies cover the losses. A typical scenario would be a burst pipe or rooftop water tank collapsing, but by the time you arrive there in the morning, your company will be underwater. Stock and computers can be replaced, but a flooded building will need at least two months to dry out fully, sometimes if it was a severe flood, it can take up to 6 months to be habitable again. If you cannot operate as normal you will lose out on revenue, meaning less money and a massive delay in business. |
| What does Business Interruption insurance provide? Business interruption insurance includes what is known as a material damage proviso, which simply means that it cuts in following after a claim made against your business covering financial losses that are of a consequence of business interruption. For more information on what this policy covers, click below. |
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| Is this policy necessary? This depends on a number of factors. If you are certain a fire burned down your premises and it would have no effect on your ability to trade, then it might not necessarily be for you. However, if you carry a lot of stock or need physical premises to operate, then this insurance type could be the only way for your business to survive the interruption to business. |
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