If your company is hit by a disaster that stops you trading, business interruption (BI) insurance covers the cost of your lost revenue. It’s also sometimes called ‘business income protection’.
It’s all too easy to overlook business interruption insurance if you’ve got buildings and contents cover, but it’s important to realise just how beneficial it can be.
Buildings and contents insurance will compensate you for damage caused to your property and equipment. It doesn’t cover you for ‘consequential losses’ which includes income and the cost of relocation – but business interruption insurance can.
With business interruption insurance, the types of events you can claim for will depend on the terms set out in your policy but you’ll usually be covered if:
- Your workplace is damaged or unusable because of fire, flood, vandalism
- Your business has suffered large-scale theft
- You can’t enter your workplace because the buildings or area around it are closed off (for example if there was an explosion)
Some policies cover more risks than others – for instance a few insurers will even compensate you if any of the events above are as a result of a supplier failure, which could affect your business. The important thing to ensure is that the policy you choose best reflects the risks faced by your own particular business.