If there’s an unexpected event like a flood or a fire and your business has to shut down for a while, this insurance would cover you for loss of trade. Find out all about business interruption insurance here.
If there’s an unexpected event that derails your profits, business interruption insurance aims to get your business back to the same trading position it was in before the event occurred.
Your business could be interrupted by a flood, fire, storm or other unexpected event. Your property insurance would cover you against any damage to your premises. Business interruption insurance can cover you against the damage to your profits.
Business interruption insurance can cover you against the temporary loss of revenue caused by your business having to stop trading for a while. It could also cover any additional expenses involved in keeping your business going. For example, you might have to move to alternative premises or hire extra staff.
Any profits lost as a result of equipment failure can also be covered by business interruption insurance.
If you own a pub in a tourist destination and it’s flooded in the middle of the holiday season, then you’d lose a significant amount of your profits for that trading year. Or if you run a design company and there’s a long-term internet failure which prevents you from communicating with clients, then you might have to spend money on alternative internet service provision while the problem is being fixed.
The flooding between December 23rd 2013 and February 28th 2014 resulted in 3,100 claims from businesses. The value of the claims totalled £149 million*.
Source: Association of British Insurers
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This article has been compiled using information available to us up to 01.07.15.