Business Interruption Insurance
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.
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 your business up and running fully 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 business interruption insurance?
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.
What can business interruption insurance cover?
Business interruption insurance can cover the loss of any sales you would have made while your business is out of action – plus any extra costs you incur to stay open. Your Westphalian insurance broker can help you find the right product to suit your business’ needs. Depending on your policy, business interruption insurance may cover you against:
Type of cover | Potential 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 by business interruption insurance?
Exclusions, the excess you need to pay and limits of liability can vary greatly depending on the nature of the product you are purchasing, the associated risk, the insurer and the requirements of your business.
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 similar exclusions as those in the policy covering buildings, stock and contents. There are exclusions which are specific to each type of policy, which your Westphalian insurance broker can outline for you.