When it comes to taking out insurance to protect your business again unexpected threats, there are a number of core covers that are likely to form the foundations of your insurance package – no matter which industry your business operates within.
Typically, business interruption insurance is one of these covers.
Business interruption insurance (BII) is a policy that’s designed to offer your company protection against financial losses caused by a disruption to normal operation. If your business has to close – fully or partially – due to an unforeseen event, business interruption insurance could provide valuable financial aid during this closure. A successful claim could provide you with funding to cover:
It is important to note that business interruption insurance is traditionally only valid subject to a successful damages claim. For instance, if your business suffered major theft that resulted in you having no stock to sell – therefore being unable to operate normally – you may not be able to claim on a business interruption policy without first making a successful claim for the stock on a contents insurance policy.
Business interruption insurance can protect against disturbances that affect your business’s ability to operate normally. This could include disturbances at your own premises or at a nearby one - providing that the event has caused a genuine interruption to your business’s operations.
An interruption could be caused by events such as:
It’s important to remember that there is no guarantee that all of the above events will be included in your cover: some may be included under standard cover, some may have to be added on as extensions, and some you may be unable to protect against altogether. The extent of your cover will depend on the size and nature of your business, as well as the level of risk you present to an insurer.
To further illustrate the protection that business interruption insurance can provide, let’s consider some examples:
In all of the above situations, a successful claim on a business interruption policy could provide financial support for the business affected.
Because business interruption cover can be added to virtually any business’s insurance package, it’s difficult to provide indicative prices without an individual analysis of the business in question. There are a number of factors that could influence the price of a business interruption insurance policy, including:
Let’s consider an example. A small florist’s shop, located in newly built premises and only requiring minimal insurance cover, would likely present a relatively low business interruption risk to an insurer. On the other hand, a large scale manufacturer, located in a flood zone and requiring fully comprehensive protection, would present a much higher level of risk. In this example, it is relatively safe to say that the florist’s business interruption insurance would cost less than the manufacturer's.
To find out how much it will cost for your bespoke business insurance package, you’ll have to get a quote from an insurance provider. It can often be beneficial to compare business insurance quotes from a number of providers, in order to make sure you’re getting the right deal for your business.
Make It Cheaper Financial Services can do just that for – saving you both time and money. Call 0800 144 4808 today for your bespoke business interruption insurance quote.
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