Business Interruption Insurance is a key asset to a business often overlooked. It provides cover to protect your business against loss of income due to a temporary interruption in the business.
Rapid resumption of business after a disaster is essential and insurance to help stay afloat is vital. Although a location is temporarily unusable and the business is not producing income, you may still incur fixed costs.
The cover is linked to a property insurance policy or a comprehensive package policy, and is sometimes called Consequential Loss Insurance. Property Insurance will only cover physical loss or damage to the location and its contents, not the loss of income while repairs are carried out. The additional coverage allotted by the Business Interruption Insurance policy covers the income that would have been earned, as the intention is to give a business financial continuity as if the loss had not occurred.
The coverage extends until the end of the business interruption period, which is determined by you, the customer. Most policies define this period as starting on the date of the disaster and lasts until the damaged property is physically repaired and returned to operations under the same conditions that existed prior to the disaster.
The price of the policy is related to risk, and our team of professionals are experienced in this field, and can offer independent and knowledgeable advice.
We have always experienced excellent service from Marsh & Company’s professional staff. The Grand Pier’s insurance requirements are complex and the market is very limited but they have always managed to provide us with the comprehensive cover we require at affordable premiums. Following the devastating fire in July 2008 when we lost the entire Pavilion building and all its contents, Marsh & Company managed the claim process for us, their assistance was invaluable.
Grand Pier, Weston-super-Mare
Case Study – Grand Pier, Weston-super-Mare
Marsh and Company Leisure team were promptly on the scene to assist with their clients 2008 Fire Loss in Weston-Super-Mare and have been working closely with Loss Adjusters since. Marsh and Company have a number of Piers throughout the UK for whom they arrange Insurance cover. Marsh advise their clients that a minimum 2 to 3 year Indemnity period under the Business Interruption section is one of the crucial factors when dealing with a major loss for this type of risk.
The Interruption to the Business is generally more than 12 months and even if the Business is up and running within a year, the long term effects until the trading has returned to where it was prior to the loss, can take a considerable time.
Why you should consider it:
- Business Interruption Insurance cover can protect against all types of unforeseen circumstances ranging from natural disasters to accidental failures of machinery and services
- A key component of business insurance – it can be as important as fire or property cover
- It is essential to work with an expert to estimate what cover you will need, based on historical records of the business
- Loss of business, even temporarily, means loss of customers
Business Interruption Insurance Policy features can include:
- Cover for profits – income that your business would have earned
- Cover for fixed costs – operating expenses, eg rent and utilities, and other costs still being incurred
- Temporary relocation cover – covers the extra expenses for moving to, and operating from, a temporary location
- Extra expenses – reimbursement for reasonable expenses that allow the business to continue operation
- Additional expenses – accountants fees & cleaning costs
- Denial of access to your premises
- Damage to public utilities
- Damage to suppliers/customers premises making your business unable to trade
- Cover for loss or damage to account records so unable to recover customer debts