So you have suffered damage to your assets, forcing your business to stop operating. What do you do? Your business interruption cover is a policy that needs to be thoroughly considered, so that following a loss you can recover with the financial support you need.

 

Issues include:

 

• What does the recovery process entail? Would it be complicated, e.g. require specialised equipment to be imported? Or would you be able to run the business from home at a moment’s notice?

• What options would you have to keep the business going? Could you get a competitor to contract to you so you can still provide solutions to your customers? If so, how much would this add to your costs?

• What would happen if your customers could no longer come to you? Would that have a long lasting effect on your business? The right insurance cover could prevent a long term loss by allowing you to quickly set up a temporary solution.

• Do you depend on another business in order to operate, such as a supplier of parts that you need? If there is damage to key supporting businesses, you can be covered for the loss or costs this causes you.

• How long will it take you to recover? All business interruption policies have an indemnity period that starts from the date of the damage, after which the insurer can cease paying for losses.

• What happens to staff? If you retain them while you recover, you will need to cover their wages, while your creditors still need paying, your car expenses keep coming in, and you still need your salary or drawings to maintain your lifestyle.

• What costs would be cut if you couldn’t operate? An insurer will never pay you your total turnover, and will always deduct costs that you save from not operating, such as stock purchases that you are able to avoid.

 

There are so many variables to be considered, so obtaining tailored cover is essential to ensuring that you recover well following a loss. Businesses are valuable due to future revenue and profit streams, and maintaining these is vital.