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What is business interruption insurance?

24/07/2012

Business interruption insurance helps keep you open for business through fire, flood and worse.

At the risk of getting all misty-eyed over a type of professional insurance, you could say business interruption insurance (sometimes called business continuity insurance) is like an old friend.

You know, the kind of friend who you don't see very often - but who you're always glad to spend time with when you do. Also the kind of friend you know you can count on in times of need.

Here’s why.

What does business interruption insurance cover?

Business interruption insurance covers your business's costs, expenses and lost revenue if you're suddenly unable to work from your usual place.

That might be because of fire, flood, crazy weather, major theft, civil unrest, meteorite strike (it could happen!) or pretty much anything that prevents you from accessing your workplace as usual.

The policy covers the cost of temporarily moving premises, including additional rent and/or the cost of leasing equipment. If needs be, it can pay the difference between your expected and actual revenue for the time you’re out of action too.

How can it help?

As a shrewd business owner, you already recognise the value of covering the equipment you use.

If a fire destroys it, for example, your office insurance will pay to replace it. Super.

But what if you’ve got nowhere to put it? What if your office is still a smoking shell two weeks after the event? Having your team camp down in the local Starbucks is hardly ideal and renting somewhere to sit is going to add to your already strained finances.

After a disaster, the most important thing for you is to get back to normality as soon as possible, as cheaply as possible. With admirable stoicism, business interruption insurance keeps you going and pays your unwelcome extra expenses.

That means you can still deliver projects on time which, in turn, helps keeps your clients onside and avoids further potential contractual problems. They don't call it 'business continuity insurance' for nothing y'know...

Do you need business interruption insurance?

Thankfully, catastrophic events with the potential to cripple businesses for long periods of time hardly ever happen.

Apart from this year’s periodic floods and gales that is. Plus Some nasty industrial fires. And every year's heavy snowfall.

Yes, apart from extremely unlikely events like these, the odds are on your side. So, if you have the money and the foresight to set up a business recovery site or a second office, or the capability to ‘go mobile’, then you could probably get by without business interruption insurance.

But if you can’t quite stretch to that, we’d say it’s probably worth bolting on to your current office insurance policy, just to be sure. After all, budgeting for insurance is always cheaper than budgeting for a disaster.

For more information call us on 0345 222 5391, click here for a quote or email contactus@policybee.co.uk

Image used under license from Shutterstock.

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