Not only will business interruption insurance help you to pay the bills during unexpected operational disruption, but it will also help you to continue maintaining relationships with your suppliers and clients too. Without it, would your business be able to survive?
As a business owner, it’s important that you have the correct business interruption insurance cover in place if the worst should happen. Read on to find out how Dover Street Insurance Brokers can help to protect your business today.
What is business interruption insurance?
Business interruption insurance (also known as time loss, consequential loss and loss of profits insurance) provides cover for financial losses if your business can’t operate from its premises as normal as a result of a fire, major theft or a flood. It provides protection if material damage to your office, warehouse or shop means that you need to stop operating and will help to maintain your income for up to 12 months even if you can’t trade.
Many business owners believe that their other insurance policies (such as buildings insurance and contents insurance) will provide protection if the worst should happen and a break-in, fire or flood means that their operations are interrupted. However, this is not the case, and whilst they might cover the initial damage, they will not cover any loss of income that you incur by not being able to sell your products and services.
When you might need business interruption insurance
Business interruption insurance can provide invaluable protection in the event of the following:
- A fire damages your building: If a neighbouring fire spreads to your building and causes damage that prevents you from accessing it, it is likely that you would need to find temporary accommodation whilst the repairs are being made. In addition, if the damage is severe, this could mean that you need to find new permanent premises, which could take time and result in a loss of trade.
- A key supplier suffers a flood in their office: Imagine the scenario – a key supplier calls you to tell you that their office is flooded and they cannot operate as a result. As you rely on their products in order to operate, your customers may switch to using the services of an alternative business instead, resulting in a loss of sales and income.
- The road where your premises is located is closed by police: If a police cordon is set up on your road due to an incident such as a gas explosion, and you can’t access your premises for days, weeks or even months, your trade and income could suffer.
If any of the events above occurred, would your business be able to cope with the financial hit without having business interruption insurance in place?
What business interruption insurance covers
A typical business interruption insurance policy will provide cover for the following:
- Physical damage that occurs to neighbouring premises which means that access to the insured premises is affected.
- The breakdown of your equipment and computers.
- More than 24 hours of utilities interruption (including the supply of water, gas, electricity, telecommunications or internet services) as a result of damage to the service provider’s premises or the networks (however, damage caused by a flood or earth movement will not usually be covered.)
- If one of your customers or suppliers is located in the European Union, you will be covered for any interruption as a result of damage to their premises which affects their ability to trade with you.
- A civil, statutory, government or public authority restricting access to your business premises for more than 24 hours due to an incident taking place within a one-mile radius.
- Damage to your business premises causing interruptions to your operations.
- A cyber-hack that caused your computer systems, programs or data to be blocked for more than 12 hours.
These are just examples of some of the types of business interruption insurance policies that we look after at Dover Street Insurance Brokers. As we know that no two businesses are the same, speak to us today to find out which policies will best meet your needs.
Do I need business interruption insurance?
If the unexpected happens and your business cannot trade, business interruption insurance will provide you with important peace of mind. If a large-scale event such as a fire, flood, storm, power interruption or major theft would affect the ability of your business to operate (particularly if you need a large premises to operate or store a lot of stock) then you should consider taking out a business interruption insurance policy – even if you only run a small business.
The cost of business interruption insurance
At Dover Street Insurance Brokers we understand that cost is important to your business, but it is crucial to ensure that you are properly protected in line with the risks your business faces. With that in mind, we will take the time to understand the specific needs of your business and recommend the amount of cover that is best suited to you.
What else do I need to know about business interruption insurance?
Unfortunately, it’s impossible to predict the future, and as a business owner you never know what’s around the corner. Although it may be hard to assess the impact a potential disaster would have on your business, it makes sense to be prepared in the event that the unexpected happens.
As well as providing cover for loss of gross revenue and profit, business interruption insurance can help you pay your employee’s salaries and rent, something which can be especially helpful if you need to pay for new equipment or staff in order to keep your business running.
In addition, it’s important to carefully consider the sum that you’ll be insured for in the event of an incident occurring. This means taking the time to work out how many years it could take for your business to start operating again after a disaster has taken place, and what your estimated gross profit or revenue would be for this period. If this is mis-calculated, your business could be under-insured, something which could also be extremely damaging.
How can I get business interruption insurance?
Dover Street Insurance Brokers have a team of specialist advisers ready to help you get the right protection in place for your business.
We will take the time to understand the specific needs of your business and are committed to delivering a completely personalised service, ensuring that you have the best possible cover at the best possible price.
To find out how much peace of mind costs, contact one of our team by calling:0208 057 4130.