One of the biggest concerns any business owner has is their ability to continue in business after a large loss. If the property material damage or loss prevents you from providing products or services to your customers, they may go elsewhere and never return. Every day you are unable to operate is a day of lost income for your business, while your expenses such as wages, rent and loans will still need to be paid. That’s where business interruption insurance comes into the frame.
Business interruption insurance covers the loss of income that a business suffers after a disaster such as closing a business facility or outlet or for the time to rebuild after a disaster.
It differs from material damage insurance in that business material damage insurance covers the physical damage to premises, your fitout and stock. Business interruption insurance provides cover for a reduction in your business income as a result of damage to your property caused by an insured event and/or additional costs arising from having to relocate. It is designed to put your business in the same financial position it would have been in if no loss had occurred.
Business interruption insurance is added on to a material damage insurance policy and not sold as a stand-alone cover. It only pays out if the cause of the loss is covered by the business material damage policy.
Our business interruption product covers a shortfall in profit due to a drop in revenue, the cost of engaging an accountant or other professional to prepare your claim and the additional increase in costs to resume your business. These increased costs can include re-writing valuable papers and records, relocation and temporary equipment to operate replacement premises. You can chose to be covered for up to 12 months of business interruption, up to 18 months and up to 24 months.
Small business owners have the option to purchase additional cover for natural disaster for an extra premium. Natural disaster insurance includes earthquake, volcanic eruption, geothermal activity and tsunami.
For more information on business insurance and business interruption cover, please download and read the policy wording.