Business interruption insurance at a glance

What is business interruption insurance?

If your business suffered an unexpected disruption, such as a fire, flood or storm, or a major supplier closes because of one of these events, how long would it take to get it up and running again? And how much would you lose along the way?

Business interruption insurance can help make sure your business keeps running smoothly after an unexpected event, by covering the turnover that is lost – so you can recover and rebuild.

Who should consider it?

For most business owners, there are ongoing expenses that you need to pay even if you’re not generating any revenue – like staff wages, supplier invoices, rent or loan repayments.

Business interruption insurance can get you through a temporary crisis by protecting your cashflow – so you can pay these expenses and help ensure the future of your business.

Type of coverPotential benefits
Revenue/income Income that would have been earned during the period the business cannot operate.
Fixed costs Operating expenses and other costs still being incurred by the property (based on historical costs).
Temporary relocation The extra expenses for moving to, and operating from, a temporary location.
Extra expenses Reimbursement for reasonable expenses (beyond the fixed costs) that allow the business to continue operating while the property is being repaired.
Civil authority ingress/egress Government-mandated closure of business premises that directly causes loss of revenue such as street closures.

What usually isn't covered?

Exclusions, the excess you need to pay and limits of liability can vary greatly depending on your insurer.

In order to claim under a business interruption policy, the loss has to arise from damage to property (buildings, stock and contents) which was insured and the damage to property has to be claimable under that policy.

Business interruption insurance is subject to the same exclusions as those in the policy covering buildings, stock and contents.

Case Study

Linda is the owner of a small office supplies business – with eight staff on the payroll and numerous suppliers.

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