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  • Kamini Patel

How Business Interruption Insurance Can Protect Your Business From Shutting Its Doors



No matter how big or small, businesses can be at risk of operational disruptions. Business Interruption Insurance can cover you for loss of income during periods when you cannot carry out business-as-usual, due to an unexpected event. This policy exists to put your business back in the same trading position that it was in before the event/disaster occurred.


Despite the risks, many small businesses fail to get Business Interruption Insurance, simply because they are unaware and often times, don’t understand the benefits. It’s important, particularly for small businesses, to evaluate the risks of having to close their door’s for a period of time due to an unexpected event and analyse what that would look like.


Would you be able to continue paying for bills? Would you be able to keep up with your staff wage payments? Ultimately, would your business continue to be financially sustainable if you were forced to close your doors for a period of time? Business Interruption Insurance is designed, not only to cover your losses (if you were to temporarily close your doors), but it is also designed to assist your business back on its feet.


Business Interruption Insurance can be purchased in two ways. The first option involves being paid by the insurer on a weekly basis- covering weekly income/sales (mostly suitable for small businesses), the second method is based on the annual gross profit along with other fixed overheads (eg wages, interest on loans, rent etc).



How Business Interruption Insurance Can Help Your Business


In the extremely unfortunate event that your business is met with an unexpected disaster (e.g. a fire, flood or any other insured event), Business Interruption Insurance will assist you (for up to 12 months) by covering any payments you need to make, such as; your rent payments, employee wages, interest and utility bills. This is so you are able to focus on rebuilding and recovering your business- to the point where you can start operating again. Some insurance policies continue payments right up until your sales are back to pre-loss levels again, so the Indemnity Period of the policy you choose is also important.




Who can get Business Interruption Insurance?



Organisations or individuals who run for-profit businesses can get Business Interruption Insurance. Often small businesses buy policies that cover liability, property, and business interruption as well.


As a business owner, you want to cover all of your bases, therefore Business Interruption Insurance is one that definitely shouldn’t be passed over before understanding the risks and benefits.


Don’t worry, your insurance specialists are here to guide you through it all. Talk to your broker today, and see if you and your business have the right cover in place to protect you from the next disaster.






General Advice Warning

The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.

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