Business Interruption Insurance

Have you considered the implications that an unexpected interruption to your business could have on its everyday running?

Your business could at any time be put out of action for days, weeks or months at a time from a fire, flood, denial of access or other unforeseen event. An incident like this could prevent you from delivering your full services and as a result put huge strain on your income, your employees and your reputation.

So how can you as a business owner, prepare for these risks?

Preparing for the worst is vital. 96%* of businesses surveyed who had ‘sufficient information on business continuity’, felt they would be better prepared to keep their business trading with a business continuity plan in place.

So what is a business continuity plan?

A business continuity plan is a plan to maintain operations if your place of business is affected by disaster. This could be a local short term problem, to days long building wide problems, to a permanent loss of a building.

Business Interruption Insurance

Should the worst happen to your business, plans can only go so far in reducing the impact on the day to day running. Having business interruption insurance should be considered.

What can be commonly covered?

Fire, storm and flood as well as utilities such as electricity, gas, water and telecoms are the most commonly covered ‘standard’ perils. Other examples include, damage at a customers or suppliers premises, or even closure of the premises by local authorities due to notifiable diseases in the area.

Getting back to business

When arranging business interruption cover, it is essential to make an accurate assessment of how long it will take to get your business up and running. If your business has specialist equipment, they could take 12–18 months to replace. In this instance, you must ensure your indemnity period covers the full duration and your estimates for gross profit or revenue are calculated accurately.

Having a business continuity plan can not only reduce unnecessary pressure on your business in the event of a disaster, but along with full financial records could mean insurers are better placed to assist in bringing your business back up to speed. 83%** of insurers would offer a discounted or improved business interruption policy where a business continuity plan was in place.

*Survey conducted by the British Insurance Brokers’ Association (BIBA) and the Cabinet Office.

**Survey conducted amongst British Insurance Brokers’ Association (BIBA) members and insurer partners. Based on research from 83 responses.