Business Interruption

Business Interruption

Protecting your greatest

asset of all

Protecting your greatest

asset of all

Remove the uncertainty

Review before you Renew

Every business is vulnerable to events like fire, flood or burglary. But while most businesses have insurance to cover their buildings, equipment and stock, many don’t protect their greatest asset of all – their ability to generate revenue.

Every business is vulnerable to events like fire, flood or burglary. But while most businesses have insurance to cover their buildings, equipment and stock, many don’t protect their greatest asset of all – their ability to generate revenue.

Remove the uncertainty

Review before you Renew

What is Business Interruption Insurance ?

In simplest terms the business interruption policy is designed to put the business back in the same financial position it would have enjoyed but for the loss. It has a carefully thought out formula, that is well tested to achieve this stated aim of putting the business back where it ought to have been financially.

The cover starts from the date of the loss and extends to when the business’s turnover and profit levels are back to where they would have been but for the loss. There is a cap set on this known as the Indemnity Period, which is chosen by the Insured when the cover is taken out and is recorded in months on the Policy Schedule.

The trigger for a claim is damage to insured property caused by an insured peril. Cover however can be extended to cover disruption from a number of sources upon which the business is dependent such as public utilities, customer’s and supplier’s premises, prevention of access, closure by public authority, murder and suicide, and the like.

Who should consider it?

There is much more to protecting the investment that your business is to you than simply insuring the physical assets of the business. The owners, shareholders, and/or those that have provided investment finance expect an income stream that will cover the financing costs, the costs of operating the business and an acceptable level of net profit to reward them for the business risk that they have taken, their entrepreneurial skill, a return on their assets, etc.

The net profit and ongoing expenses including, payroll, management and other staff bonuses and financing costs are all regarded as insurable Gross Income or Gross Profit depending on the policy, but whatever it is called, these expenses should be insured. Without it your business may simply go down the plug hole in the event of a loss.

What are the benefits of Business Interruption Insurance?

Business interruption insurance often provides much more than just disruption caused by damage to property owned by you. It can provide cover for disruption due to:

  • damage to property used by you at your premises caused by an insured peril e.g. the landlord’s building, a sub-station on your premises owned by an electricity company.
  • damage to a customer’s premises caused by an insured peril;
  • damage to a supplier’s premises caused by an insured peril;
  • prevention or hindrance of access to your premises caused by an insured peril,
  • disruption caused by a failure of supply from a public authority caused by an insured peril,
  • a murder or suicide at your premises

While cover for disease outbreak is under review many insures still provide cover for closure due to legionnaires disease and other non pandemic illnesses.

Other covers for additional increase in cost of operating and claims professional fees to engage an expert on your side to help manage the loss and prepare your insurance claim are also typically available.

HDL, the right partner for you.

  • Renowned expertise & accountability
  • Stability & consistency of approach
  • Managing complexity
  • Integrated broking and claims
  • Building trust through service
  • Delivering on promises

Seek advice from HDL

Business Interruption insurance covers do vary greatly and require a detailed understanding of your business risk profile.  That’s why our our specialist broking team members get to know your business enabling them to provide considered advice delivering you the best policy for your specific needs.

It is therefore always best to seek advice from HDL regarding cover requirements.

Contact HDL for advice

Importance of setting an appropriate indemnity period.

The indemnity period is the period which the insurance policy will provide cover for disruption to your business. It not only covers the period which it takes to rebuild a damaged building or replace stock etc., it is the period which you expect the business will take to be back exactly where it was at the time of the loss.

This means getting back or replacing any lost customers and/or protection for any on-going increased costs of working to the business. A good example of this is that under many lease agreements the tenant is bound by the lease to maintain the lease if repairs are started within three months and completed within a time period sometimes 6 other times 9, 12, 18 or even 24 months. There is no use having a short indemnity period if a) you have to incur the costs of moving back into the finished building after the indemnity period has expired or b) you have to pay the lease out.

It is important that a 3 month cover, i.e. a 3 month indemnity period is not 25% of the cost of 12 months coverage. The reason for this is the frequency of short disruptions compared to longer ones. You will find that the cost difference is so small it is better for you to insure for at least 12 months as a minimum.

We strongly suggest you take a longer indemnity period if you feel that 12 months is even the slightest bit “skinny”. Twelve months may sound a long time, but from our experience, it goes far too fast and many a business is only just started rebuilding after a major event let alone fully recovered.

Complimentary Review

Review before you Renew

Complimentary Review

Securing optimal insurance protection is becoming more challenging.

Having a fresh set of eyes can make a dramatic difference.  HDL welcomes the opportunity to evaluate and challenge your current risk and insurance program in a confidential manner that avoids disrupting existing relationships.

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Our Global Insurance Network

Over 150 Insurers across the globe.

aig2
allianz
Berkley
CGU
Chubb logo
gt-insurance
Hollard-logo
IAL
lloyds-v3
nit
qbe
vero
zurich2