Supporting your business through financial disruption
When an unexpected event disrupts your business, the financial impact can extend well beyond physical damage. Business Interruption insurance is designed to help manage these financial impacts by supporting your business while it recovers from an insured interruption to trading, helping maintain financial stability during the recovery period.
Why Business Interruption Cover Matters?
Business Interruption insurance may help protect your business against loss of income and increased costs following an insured event that disrupts your ability to trade. Typically linked to a commercial property or material damage policy, this type of cover focuses on financial recovery following insured damage, not just repairing physical assets.
Not all interruptions are covered, and cover, benefits and conditions vary depending on the policy, insurer and structure of the cover in place.
Many businesses insure buildings, equipment and stock, but can underestimate the true cost of downtime. For many businesses, the financial impact of interruption can exceed the cost of repairing physical damage, particularly where recovery takes longer than expected.
Even a temporary interruption can affect:
Business Interruption insurance is designed to help manage these pressures while your business works towards recovery following an insured event.
What Business Interruption insurance may cover
Cover varies significantly between policies. Depending on the policy, Business Interruption insurance may respond to:
Ongoing operating expenses
Fixed costs that continue even when your business cannot operate, such as rent, wages, finance costs and utilities.
Loss of income or gross profit
Income your business would have earned during the interruption period, generally calculated using historical trading information and adjusted for future trends.
Additional or increased costs
Reasonable extra expenses incurred to reduce the impact or duration of the interruption, such as hiring temporary equipment, outsourcing work or expediting repairs.
Temporary relocation costs
Expenses associated with operating from alternative premises while repairs to the insured location are underway.
Access restrictions
Loss of income resulting from authority-ordered closures or restricted access that directly impacts your insured business premises.
Download your free checklist
Business Interruption Readiness Checklist
Examples of Business Interruption in action:
- Retail business – storm damage
Storm damage made a retail premises unsafe, forcing the business to close temporarily. Business Interruption insurance helped support lost income and ongoing expenses during the closure period while insured repairs were completed. - Manufacturing business – fire damage
A fire damaged a key production area, halting operations for several months. Business Interruption insurance assisted with lost income, staff wages and additional costs incurred to continue limited operations during the recovery period. - Farm operation – machinery failure
Failure of critical machinery during peak season disrupted production and delayed output. Business Interruption cover helped offset lost income and contributed to additional costs incurred to minimise the interruption and resume operations.
Examples are illustrative only and assume relevant policy triggers are met. Outcomes depend on policy terms, conditions and individual circumstances.
Unsure if Business Interruption Insurance is right for your business?
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Need more information?
Take a look at our free resources that have been designed to help you understand Business Interruption Insurance. Simply download and use as required.