Business Interruption & AICOW Cover: What You Need to Know

Are you confident that your business has the right insurance coverage? It may shock you that only 1 in 10 Australian businesses have the right amount of insurance. Unless you are confident that you are appropriately insured, you may be at risk of falling in the latter. However, it’s not too late to reassess your insurance situation. We’re here to guide you through the in’s and out’s of Business Interruption & AICOW Cover – and why it’s crucial to understand how it may affect your business.

In this guide, you’ll learn:

  • What is AICOW cover
  • AICOW and Business Interruption Insurance
  • Why is AICOW important
  • How does AICOW work
  • How much does AICOW cover cost

What is AICOW?

AICOW stands for Additional Increased Cost Of Working. In most business interruption policies, AICOW is an optional cover. However, it is a vital cover that a business owner should consider. This cover allows for additional expenditures during a period of interruption. AICOW ensures you are up and running as quickly as possible, reducing your customers’ inconvenience and returning you to a state of profit.

What is the difference between AICOW and ICOW?

AICOW is often confused with ICOW (increased cost of working.) From a fundamental standpoint, ICOW covers those increased costs of working that are not more than the loss of revenue that would occur if the increased costs were not paid (i.e. economic losses). AICOW covers those costs that would exceed the resulting loss of revenue (i.e. uneconomic losses).

For example, if you spend $100,000 attempting to save the loss of income and only save $50,000, AICOW pays you the $100,000, but ICOW would have limited the refund to $50,000 only.

Business Interruption & AICOW

Many business owners ask why they would need AICOW when they already have business interruption insurance? As stated above, business interruption insurance can protect you up to an agreed amount with the ICOW. It explains why Insurance Brokers are detailed in their risk assessments when auditing your business.

However, as with life, some things don’t go to plan. 

When an incident has occurred beyond normal circumstance (which does happen), AICOW allows access funds to cover additional expenses beyond the Business Interruption coverage amount. 

Get peace of mind by having the right insurance

How does AICOW work?

When speaking to your insurance broker, they may offer additional AICOW cover to your business interruption insurance policy.

If you choose to include an AICOW cover, you will have the ability to access additional funds if the expenses exceed the business interruption coverage amount.

During the claims process, many business owners see the benefit of AICOW cover. Rather than scrambling to find extra cash to cover unexpected expenses, the business owner can confidently know that the AICOW cover offers another layer of protection in their insurance policy.

“the business owner can confidently know that the AICOW cover offers another layer of protection”

Business Interruption & AICOW Case Study

Following a recent storm, a NSW business suffered significant water damage in their warehouse after a portion of the roof collapsed, affecting a large amount of their stock. The repairs for this involved more than $250,000 of work required to perform extensive replacements on the roof. During this period, the undamaged stock had to be moved to a different location while the roof was repaired. Not only is this a disruption to a business, but additional costs must be calculated. In this situation, the company was assisted by its AICOW coverage, helping offset the costs of relocating the stock (freight and storage).

Do you need Business Interruption & AICOW cover?

Business interruption policies vary significantly, as their coverage levels can depend on several factors. We find that many businesses struggle to buy the right business interruption policy, as it isn’t a policy that you can easily purchase online. 

Ultimately, many businesses are at risk of unexpected interruptions to operations. Having the appropriate business interruption policy, coupled with an AICOW cover, means that you will get double the protection when you need it most. 

If you have any doubt in your mind, don’t leave it to chance and speak to an insurance broker. 

How much does AICOW cost?

Just like any insurance policy, prices vary dramatically on your circumstances. However, many business owners choose to have the additional AICOW cover as it provides excellent value for money.

We always recommend that you make an informed decision regarding business insurance because insurance costs are sometimes minimal compared to the out-of-pocket expenses you may face without the right insurance. 

The easiest and most reliable way to get peace of mind is by speaking to an insurance broker. They will guide you through the types of insurance and handle claims on your behalf, as well as supporting you when you need it most.

Need help with AICOW cover? 

Is your business adequately insured? It may be time to review your risk management plan and speak with an experienced broker about business interruption insurance. 

Our team at Macey Insurance Brokers has years of expertise working with businesses across all industries. Working with us, we will help you obtain a practical cover that reflects all your business needs, considers all risks, allows for an appropriate indemnity period, and comprehensively covers your business.

Contact us or try out our online insurance quiz.

Download our Business Interruption Insurance Factsheet


The information contained on this website provides a general guide only. Changes in circumstances may occur at any time and may impact the accuracy or completeness of the information; however, to the extent permitted by law, we do not warrant the accuracy, reliability or completeness of the information and do not accept responsibility for any decision taken based on information shown in or omitted from this site. By accessing this site, you agree that this is general information and cannot be relied upon as a substitute for appropriate financial, legal or other professional advice specific to your circumstances. To the extent permitted by law, Macey Insurance Brokers Pty Ltd will not be liable under any circumstances for any direct, indirect or consequential damages arising in any way out of your use of this site.


Macey Insurance Brokers wishes to ensure that this website is as informative as possible. Consequently, the site contains links to other sites. Macey Insurance Brokers Pty Ltd does not endorse or recommend the content of any third party sites which may be mentioned or described or linked to, or from this site. Nor can we be held responsible for such sites’ products or services or these organisations’ privacy practices.

Share this

Find the right business insurance for you​

Take this short quiz to find out what type of insurance you should consider for your business