Business Interruption

Your business operation is halted due to unforeseen circumstances. Is there a way to recuperate the loss?

What is Business Interruption Insurance?

Business Interruption (BI) allows you to recuperate a portion of your loss of income or interference with gross profits, through the inability to open your business, causing from accidental damage to your property.

What does Business Interruption Insurance cover?

BI indemnifies you against loss of gross profits and/or increased cost of working arising as a result of damage to the your premises/property from any perils insured by the underlying Industrial All Risks policy:

- Loss of revenue: Revenue you would have made if your business was open.
- Mortgage, rent and lease payments: For the space your business operates from.
- Loan payments: Such payments that you need to make in those period.
- Taxes: Regardless of the frequency you pay.
- Payroll for your employees: Salaries of your workers in those period should they cannot work.
- Relocation costs: Costs of moving to new or temporary location because of physical damages.
- Extra expenses: Costs such as renting another place to run your business after a covered loss.
- Training costs: Costs of teaching new employees how to use new machineries and equipments after a covered loss.

It is also to important to note that the policy is only covered during its indemnity period.

How important is Business Interruption Insurance?

Expect the unexpected. You never know when an accidental damage can cause your business to be unoperational, yet it is not a policy that is generally prioritized. BI is often overlooked due to business’ tendencies to take interests in protecting contents and properties, yet in reality there are other costs that can continue to incur when those aforementioned assets get damaged. Ultimately, this could be the difference between survival and closure.

Who needs Business Interruption Insurance?

BI is applicable to almost every industry. If your business has risks that can cause accidental damage and consequently lose profits due to unforeseen circumstances, you are likely going to need BI. However, it must be noted that an IAR policy is required in order to take out a BI policy.

How much does a Business Interruption policy cost?

Generally, the factors that insurers take into account when determining the price of a BI policy are as follows:

- Gross Profit or annual revenue
- Maximum Indemnity period under the policy
- Potential factors that may cause accidental damage

Although most policies maximum indemnity period is 12 months, it is important to consider the different circumstances that can cause accidental damage that can lead to a halt in your business operation. Careful evaluation regarding the length of time to get the businesss up and running again is essential. Moreover, the strength of your security system and the costs needed to rent during the hiatus can provide further understanding in terms of optimum indemnity period

Why CHAZ?

We can utilize our deep expertise from a wide range of industries in providing guiddance and recommendations on not only optimum and cost-effective limits, but also potential pitfalls that may impact your business, including the ways to avoid underinsurance problems.

Note: The content provided is for informational and educational purposes only. The coverage written may change without notice and may not be applicable to all situations and policies. Terms, conditions and qualifications are also subject to circumstance, supplementary material and underwriting. CHAZ Insurance Brokers Ltd. is not liable for any discrepancies should there be any. For more information, please contact us via the enquiry form below.