If you aren’t sure if you need insurance or not, then you are not alone. So many people are in the same situation as you are right now, but this guide will help you to find out whatever it is you need to know, so you can make an informed decision.
What is Business Interruption Insurance?
Business interruption insurance will cover you if you were to ever experience a loss of income. It also covers you if you need to keep your company running if you were to experience an incident that would influence your normal activities. The purpose of this kind of cover would be to safeguard your company against any financial loss, or any additional cost that may occur as the result of an unforeseen event. This could include a flood, fire, or even an electrical failure. Even though it is entirely possible for your policy to vary, it’s important to know that this type of policy will generally cover you for losses of material damage. In very extreme cases, it is important to know that business interruption insurance will give you cover if you have a civil authority shut down your company due to damage that may have occurred to a nearby location.
How does Business Interruption Insurance Work?
There are three factors that you have to take into account when choosing business interruption insurance. You have to take into account the indemnity period, which is the length of time that you will be covered for under the policy. Normally this will last for 12, 24 or 36 months. When the time comes for you to choose your cover, you need to try and anticipate how long it will take your company to get back up and running again.
Another thing to consider would be gross profit. This is the maximum amount that you would like to be insured for. You will have to declare your gross profit and you should also know that claims will be paid on a basis of being declaration linked. This means that it is possible for your insurer to apply an uplift on your profit so you can then anticipate future growth.
What Type of Interruptions Will I Be Covered For?
You will be covered for a huge range of interruptions, should they occur. Some of them include your team not being able to access your business premises as the result of a natural disaster, or damages stopping your team from being able to work. This can be at the premises of a supplier, or at the premises of a customer. Some policies will cover you for viruses and hackers, amongst other cyber risks.
Taking out business interruption insurance is always a good idea, regardless of whether you run a small company or a large corporate business. It will protect you in the event of an unexpected disaster, ensuring you experience no loss of income during this time. If you want to find out more about this then please get in touch with us today.