In the world of business, challenges and uncertainties are a daily occurrence. The right insurance cover is necessary in order to protect against unexpected incidents and potential disruptions to ensure your business remains viable and successful.
There are various Business Insurance policies available that assist in managing risk and protecting your business assets, revenue and liabilities. Business Interruption Insurance, in particular, is an essential policy class that assists in covering lost profits and expenses following a property damage loss to your business.
Learn more about Business Interruption cover including the risks it assists in mitigating, how loss is determined, general policy exclusions, and for whom the policy is necessary.
What is Business Interruption Insurance?
Business Interruption cover is designed to provide cover for financial support after unexpected property damage losses occur. These events can include natural disasters, fires, storms, water damage or many other perils covered by a property damage insurance policy that force temporary business closure or operations to cease.
This policy compensates for lost income following a loss to allow you to return to business as usual, as soon as possible. Coverage for this form of insurance ends at the end of the business interruption period or when your indemnity period is exhausted. (whichever occurs first)
Atlantic generally recommends a minimum indemnity period of 12 months however many businesses have a requirement for limits of 24 or 36 months and above depending on the complexity and time it would take to reinstate assets and turnover following a loss.
Generally, this policy is available as part of a comprehensive Business Package policy or Industrial Special Risks Policy however some specialist insurers can offer this as a stand alone Policy. Business Pack and ISR Insurance is a cost effective way to cover your business for common Property exposures, including Fire and Perils, Burglary, Business Interruption, Money, Glass, Machinery and more.
Potential Risks Of Unexpected Disruption
When unexpected business disruption occurs this will often have a catastrophic and immediate impact on a businesses turnover and cash flow.
A Business Interruption policy acts as a financial lifeline until the business can continue operating at full capacity. This essential cover can ensure you are able to survive, cushion the financial blow and recover quicker, helping you to regain your market position and rebuild your business.
Determining Business Interruption Losses
Typically, to determine potential Business Interruption losses insurers will compare financial information prior to the loss and after the property damage loss has occurred. Policies may also extend to provide cover for temporary relocation, additional increased costs of working and rent receivable or payable.
When determining the amount of cover that your business may require, it is recommended that you work closely with an experienced Insurance Broker such as Atlantic Insurance who will be extremely valuable when deciding the amount of cover that is most appropriate for your business.
Policy Exclusions
While this policy can cover many elements associated with loss due to disruption to business activities such as reimbursement for gross profits, employee wages, business expenses and more, there are some elements generally not covered. Cover is still generally not not offered for claims relating to Covid-19 or any disease declared to be a listed human disease under the Biosecurity Act 2015 and property insurance exclusions will also likely trigger an exclusion in a business interruption claim.
Who should consider this policy?
This is a valuable risk management tool that can be beneficial for a wide range of businesses. Any business that relies on a physical location, specific equipment, or a consistent revenue stream should consider this form of insurance.
Some types of businesses that may find this policy is particularly important include those in retail, manufacturers, industrial, restaurants and hospitality, healthcare providers, small businesses, or those in disaster-prone areas.
Comprehensive Business Interruption Insurance with Atlantic Insurance
Atlantic Insurance has assisted small, medium and large businesses insure their assets and liabilities in Australia and beyond since the early 1980s, experienced in offering considered, tailored insurance plans. With specialised risk management and insurance advice, along with fast, expert claim handling, you can rely on Atlantic to protect your business and ensure it is able to thrive.
Contact us today to discuss your Business Interruption Insurance needs and receive a quote.
Any information contained on this page of the website is general advice only and has been prepared without taking into account your objectives, financial situation or needs. Your should consider these, having regard to the appropriateness of this advice and the relevant Product Disclosure Statement (‘PDS’), Target Market Determination (‘TMD’) and Financial Services Guide (‘FSG’), which will be provided following any formal recommendation to you.