Business Interruption Insurance

Cover at a glance

Business Interruption cover protects your business’ profits
Normally triggered by a material damage claim
Can be the difference between your business recovering from a loss or closing its doors for good

Policy Overview

Business Interruption Insurance acts as a crucial safety net, protecting your business’s income in the aftermath of a significant loss. This coverage is typically triggered following a material damage claim on your premises, such as from fire or storm damage. Once triggered, Business Interruption Insurance compensates for your lost earnings while your business recovers and works towards resuming pre-loss operating levels. This protection continues up to the length of the Indemnity Period, ensuring that your business has the necessary financial support during this critical time.

Many business owners overlook or underestimate the importance of Business Interruption Insurance because it addresses an intangible exposure—loss of income rather than physical damage. However, the impact of this loss can be devastating, and without proper coverage, it can jeopardise the future of your business. By providing cover for lost revenue, operating expenses, and sometimes even the cost of temporary relocation, Business Interruption Insurance can be the difference between successfully overcoming a disaster or being forced to close your doors permanently.

Tailoring a Business Interruption policy to suit your business is essential. The Indemnity Period needs to be carefully considered, taking into account how long it might realistically take for your operations to return to normal after a major incident. We can help you evaluate your risk exposure, select an appropriate Indemnity Period, and ensure your policy provides comprehensive coverage that meets your business’s unique needs, allowing you to focus on recovery, not financial strain.

The information provided on this page that may have been implied is General Advice only and does not take into consideration your specific needs, risk appetite or financial requirements. Please contact our office to discuss and review your needs and the appropriate financial product best suited to meet your requirements . Before purchasing any financial product, you should always read the Product Disclosure Statement to ensure the product is suitable for your needs.

Frequently Asked Questions

What does Business Interruption Insurance cover?

Business Interruption Insurance covers the loss of income and ongoing expenses that your business incurs following an insured event, such as fire, flood, or storm damage. This can include lost revenue, wages for employees, lease payments, and additional operating expenses necessary to get your business back to pre-loss levels.

How is the Indemnity Period determined?

The Indemnity Period is the length of time during which the insurer will compensate your business for lost earnings. It's crucial to choose a period that reflects how long it might realistically take to fully recover from a significant loss, considering factors such as rebuilding times, replacing equipment, and regaining customers. A longer Indemnity Period offers more protection, but premiums may be higher.

Does Business Interruption Insurance cover temporary relocation costs?

Yes, many Business Interruption policies include cover for the costs of temporarily relocating your operations if your premises are unusable after an insured event. This helps ensure your business can continue operating while repairs are underway, minimising the long-term impact on your revenue.

What types of businesses should consider Business Interruption Insurance?

Business Interruption Insurance is highly recommended for businesses that rely on physical premises, equipment, or specialised processes to generate income. Retailers, manufacturers, hospitality businesses, and any operation with significant overheads or a reliance on location-specific activities should consider this type of cover to safeguard their income.

How are lost earnings calculated under a Business Interruption claim?

Lost earnings are typically calculated by comparing your financial performance before and after the loss, including projected revenue and fixed costs during the recovery period. Insurers will examine your historical financial data to determine the earnings you would have generated had the insured event not occurred.

Is Business Interruption Insurance only available with Property Insurance?

Yes, Business Interruption cover is generally an extension of your Property Insurance. It is triggered when there is material damage to your property caused by an insured event, such as fire, storm, or malicious damage. Without a corresponding property damage claim, Business Interruption cover will not activate. In limited circumstances your Business Interruption cover can be placed seperately, however it is still reliant on a property policy being triggerred before it will respond.

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