Many business owners are not aware of business interruption (BI) insurance or understand the benefits it provides. It is therefore easily missed when insuring your business against risks. If you use an insurance broker, they will usually assess whether this additional cover is needed for your business and offer it as an addition to your buildings and contents policy. However, if you use one of the online comparison websites, it would be natural to think your buildings and contents insurance would cover most eventualities.

Business interruption insurance is not necessary for all businesses but is crucial for some; for example, if you have equipment and machinery that is difficult to replace or carry a lot of stock that will take time to re-manufacture, this type of insurance cover could mean the difference between business survival and failure.

How does business interruption insurance work?
Cover is available as an add on to your buildings and contents insurance. If an insured risk affects the running of your business, or causes extensive damage to the buildings, machinery, equipment or stock, resulting in your business having to shut down for a period, the insurance will cover the financial losses, for example:
  • Loss of revenue due to closure.
  • Increased costs of working such as temporary relocation or equipment hire.
  • Additional employee costs for overtime or hiring temporary employees.
  • Temporary storage costs and removal fees.
  • Safety and security at temporary accommodation.
  • Loss of income from rent.
  • Long term effect of loss of sales and customers.
If your business is not in a position to recover quickly from a major incident, then business interruption insurance fills the gap.

For example:
Business_Interuption_InsuranceA fire engulfs a large section of your premises and damages equipment and stock. Your buildings and contents insurance will cover the repairs and replacement of equipment and stock, but this may take months to complete.

Flooding or water damage repairs can take months to make the building habitable again and unless you can easily relocate and hire machinery and equipment, your business could fail during the time it takes to start trading again.

Each business must assess their own level of risk and whether a major incident would be manageable without the financial support that business interruption insurance provides.

This is where an insurance broker can help. Talk to CLA (Risk Solutions), your local insurance broker in Sutton Coldfield to get a quote for how much it would cost to add business interruption to your buildings and contents insurance. Call 0121 321 4600