Business interruption – events that could stop you trading
CLA (Risk Solutions) Ltd
Your commercial insurance policy will cover you for the replacement of buildings and contents if your business suffers a major disaster.
However, following an insured event such as a fire, flood, theft, vandalism or IT outage, business interruption insurance would cover the loss of income during the period of closure while you get up and running again.
A business interruption insurance policy will cover you for a range of costs:
• Loss of rental income
• Additional staff costs
• Temporary relocation
• Security for buildings
• Loss of customer loyalty and subsequent reduction in sales
Owners often overlook business interruption insurance because they think they are covered by their buildings and contents insurance.
If you were unable to trade after a major incident and your customers had to look elsewhere while you got your business back on track, could you survive for what might be a period of up to 12 months?
Even a few months would be enough to destroy some businesses and some previously loyal customers may never return when you open the doors again.
Business interruption insurance As well as the cover outlined above, business interruption insurance can include damage to a neighbouring building that may affect the running of your business and result in a period of closure and loss of income.
It can also cover the loss of income if one of your suppliers suffers a major loss that affects the supply of products to your business. Specific risks policies can also be written.
One of the growing risks to business continuity these days is cybercrime.
If you have cyber risk insurance, you can include business interruption insurance along with your cyber insurance to support the business while the breach is identified and repaired.
Assessing your risks
Every business has different requirements and the level of risk and insurance cover required will vary.
A manufacturing business with premises, machinery and stock will probably need longer to recover from a major incident than an office that could relocate within a few days.
However, cyber risk may be greater for an office-based technology business.
This is where an insurance broker can offer their expert advice to find the most suitable cover for your business.
Call CLA (Risk Solutions) Ltd on 0121 321 4600 to discuss your business insurance.