What is Business Interruption Insurance?

If a fire causes the facility to be temporarily unusable, what would you do next? Would your business be able to pay utilities, wages or any other standing charges without any income? It could take months before the damaged property is rebuilt and the stock, machinery and equipment are repaired or replaced. Ideally, you would move to a temporary location while your permanent place of business is being repaired. Yet, traditional Property Insurance does not cover this move or a loss of income when a business must temporarily close. With Business Interruption Insurance, this setback can be minimised by simply adding this cover to your Property Insurance policy.

What can be included in a Business Interruption Policy?
• Compensation for lost income if you have to vacate the premises as a result of disaster-related damage covered under a Property Insurance policy.
• Compensation for the gross profits that would have been earned based on previous financial records, had the major loss/peril not occurred.
• Covers operating expenses, such as utilities, that must be paid even though business temporarily ceased.
• Covers the increased cost of working, including expenses of operating in a temporary location while repairs to the permanent location are completed.

Considerations for Business Interruption Insurance
• Business interruption insurance cannot be purchased on its own—it must be added to an existing insurance policy, such as property or office insurance.
• Purchasers must also determine that the policy’s maximum indemnity period is sufficient to cover the amount of time it will take for the business to recover following a major loss. This includes considering the worst damage or disaster that the business could incur, estimating how long it will take to repair or replace buildings, machinery and stock, and determining the length of time it will take to recover customers and market share. Typical maximum indemnity periods range from 12 months to 36 months, in 6 month increments.
• Price of cover depends on the risk of disaster to the premises. This may depend on the business location, nature of the business and how easily the business could function at an alternate location on a temporary basis.

Insurance experts estimate that Business Interruption Insurance is one of the most, if not the most, valuable cover available. Yet, it is often overlooked by business owners. Since Property Insurance only covers the cost of physical loss or damage and contents of a business in the event of a disaster, Business Interruption cover is invaluable in covering the loss of income while the permanent business location is being repaired.

Contact Direct Insurance Group at 01277 844 360 today to learn about our business continuity resources and to make sure that your business can survive an interruption.

We’re Exhibiting at RWM – Stand 4J63

The RWM exhibition is the UK’s premier event for resource efficiency and waste management solutions. Covering all aspects of the waste hierarchy, it caters to the demands of this rapidly growing sector and provides them with information and advice on a host of issues, challenges and potential areas for growth.

This year, held at the National Exhibition Centre in Birmingham between 12th and 15th September, over 500 exhibitors will attend the event – and we are delighted to be one of them. You will find our team on stand 4J63.
We’ll be showcasing our range of products including:

– Waste Liability Insurance
– Plant and Machinery Insurance
– Fleet Insurance
– Commercial Property Insurance
– Cyber Liability Insurance

We will also be offering visitors to the stand the opportunity to win a PS 4 Pro. All they have to do is take part in our retro gaming competition on the stand. For visitors who are not too keen on taking part in the gaming battle simply drop off your business card for your chance to receive a magnum of champagne.

To find out more, come and talk to our team on stand 4J63.

If you’ve not yet registered to attend, you can do so free of charge here.

Winners will be announced on our Twitter feed @DirectIns so make sure you give us a follow.