Business Interruption Insurance

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.

Would I Benefit from Business Interruption Insurance? • Are you a small business owner? • Do you run a business dependent on a few major clients you can’t afford to lose? • Do you have no reserves of cash to tide you over should your business have to shut down temporarily?

If you answer ‘yes’ to any of these questions, then you might consider taking out business interruption insurance.

Frequently Asked Questions

What are the Benefits of Business Interruption Insurance? If there’s an unexpected event that derails your business, business interruption insurance aims to get your business back to the same trading position it was in before the event happened. Your business could be interrupted by a flood, fire, storm or other unexpected event. And while your property insurance would cover you against any damage to your premises, business interruption insurance can cover you against the damage to your profits; covering 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. Profits lost as a result of equipment failure can also be covered by business interruption insurance.

Can You Give Me an Example? 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.

Did You Know? The flooding between December 23 2013 and February 28 2014 resulted in 3,100 claims from businesses. The value of the claims totalled £149 million*. Source: Association of British Insurers

What do I Need to Consider? • Adding business interruption insurance to another policy, such as building and contents insurance • How much month-on-month revenue your business could lose • How long it would take you to restore your business after a complete breakdown • How long you need business interruption cover to last – two months, 24 months or longer?

This article has been compiled using information available up to 14/09/22. Whilst care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in this document.