This cover is also known as Consequential Loss Insurance and it is a vital component of any business continuity plan.
The intention of Business Interruption Insurance cover is to restore the business to the financial position it was in prior to an insured loss.
A Business Interruption policy covers the loss of income that a business suffers after an incident at its main facility, whilst the facility is either closed because of the disaster or in the process of being rebuilt after it.
A Property Insurance policy only covers the physical damage to the business, while the additional coverage allotted by business interruption insurance covers the profits that would have been earned.
When reviewing this cover you should remember the indemnity period which is the actual time it will take you to re-position yourself as if the loss never occurred. It can be anything, typically from 12 – 36 months and is a key component when settling the claim.
Business Interruption Policies vary from one business to the next and munstergroup Insurance tailor the policy to suit the business needs. A guideline as to what a policy may contain is outlined here. Please note it can only be provided in conjunction with a property policy.
The cover can include items such as:
Profits lost as a result of zero or reduced turnover
Loss of Rent
Cost of Alternative Premises while the Building is Repaired or Re-Built
Increase Cost of Running the Business as a Result of the Disaster
Operating Expenses that exist even when Business is Closed.
All policies are tailored to a particular business and its requirements therefore the list above are a guideline.
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