Depending on what business your company carries out, the Business Interruption section of your insurance policy could, perhaps, be the most important.

It could take months following, say a fire, before a damaged property is rebuilt. Then there is the stock to be replaced as well as machinery or equipment being repaired or replaced. Without any income into the business, would it be able to pay fixed costs such as utilities or wages? Many businesses would be forced to close down without Business Interruption cover.

A policy can provide:

  • Compensation for lost income
  • Cover for operating expenses whilst the business is unable to trade
  • Cover for increased costs of working which can include the expenses of working from an alternative location on a temporary basis
  • Compensation for the gross profits that would have been earned

Business Interruption has to be an add on to existing cover such as an office policy or property cover. Each business must decide the maximum indemnity period in order to provide them with sufficient time to recover from a major event or loss.

The Chartered Institute of Loss Adjusters identified in their 2017 survey found that 44% of policies had a declared sum insured that was insufficient with the average shortfall also being 44%.

If you would like more information or discuss this topic in more detail, please do not hesitate to contact me.