Many businesses go broke in the year after their business was temporary interrupted due to a major disaster. These businesses are in a better position and recover more quickly if they are covered with business interruption insurance.
Remember the major disaster sometimes may not even happen to your premises. It could be your neighbour’s business and prevent you from operating for a lengthy period. How would you cope?
The bills won’t stop and the turnover will probably cease. There maybe extra costs for moving, renting other premises and paying staff – wages, utilities, and suppliers while you are not operating. Once you return to business, there may be some period when your turnover is reduced until you can rebuild your customer base.
These financial losses can be crippling to any business particularly a small business owner.
What is Business Interruption Insurance?
Business interruption insurance is an insurance that covers your loss of income resulting from disaster-related incidents that restrict you from normal trading activities during any insurable event such as Fire, Water Damage, Earthquake, and in addition lost trade due to utility services being unavailable such as electricity, Water, and Gas.
The aim of Business Interruption Insurance is to put your business back in the same position soon as possible and cover any additional cost you incur in the process.
Why it is important to your business?
Many small business owners fail to think about how their business would cope when things gone wrong.
Business Interruption Insurance is usually added to a property insurance in a package policy. An example of policy coverage under Business Interruption is
- Loss of gross profit that your business would have been earned in the normal business activities.
- Cover for fixed costs that do not vary such as rental, wages, etc.
- Temporary Location. Moving costs and renting costs if you have to temporary move to another location.
- Other additional costs for the purpose of getting back into operation.
The insurance cost is minimal when compared to the consequences of the unexpected. If you are unsure about your current coverage and need a professional advisor to review your policy or risk, please contact the Friendly Team at Insurance Made Easy for personal assistance to discuss your own individual circumstances 1800 64 1260.