Commercial

Business Interruption

Helping a business get back on its feet after a catastrophic event.

While it’s very easy to picture the physical devastation caused by a fire or flood, for many businesses it can be difficult to envisage the financial implications such an event would have on their balance sheet.

This is surprising, as this has the potential to be altogether much more devastating to the business than the loss of any physical assets.

When a business suffers damage, it is almost certain that two things will happen:

  • The day-to-day running costs of the business will increase

  • The ability to earn revenue is diminished

This is where Business Interruption Insurance steps in, it will alleviate the financial headaches that can continue while the business attempts to bounce back from the original event.

Key Considerations

It is a very common assumption that a business can return to a ‘pre-loss’ position within 12 months, but this merits some careful thought on the following questions:

  • How quickly can we get ourselves into an alternative premises?

  • Will there be any logistical issues as regards movement of staff?

  • How long will it take for our new production plant to be delivered, installed, tested and commissioned?

  • Is replacement stock readily available?

  • What if the loss happens at the beginning of a peak trading period and we haven’t fully recovered 12 months later?

The maximum indemnity period needs to reflect a worst case scenario so that insurers continue to make good your financial shortfall until the business returns to normal.

Standard Extensions

Standard extensions to the cover include the following:

  • Denial of Access

  • Damage in the vicinity of your premises, preventing you enjoying normal access to your business premises.

  • Failure of Public Utilities 

  • Electricity, Gas, Water & Telecoms

  • Act of Competent Authority 

  • If your premises or nearby area becomes a matter of public health & safety or a Scene of Crime

  • Suppliers / Customers Extensions

  • A loss suffered by another party in the supply chain has the potential to affect your business.

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