Business Interruption Insurance - Insurance Broker Australia

Business Interruption Insurance

August 5, 2019

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Business interruption insurance can help your business to keep running if the insured property is lost or damaged after a catastrophic event such as fire, by covering ongoing costs so you can recover and rebuild.

What do you need to know?

Who should consider it?

For most business owners, there are ongoing expenses that you need to pay even if you’re not generating any revenue – like staff wages, supplier invoices, rent or loan repayments.

Business interruption insurance can get you through a temporary crisis by protecting your cashflow – so you can pay these expenses, and help ensure the future of your business.

What can it cover?

Business interruption insurance can cover the loss of any sales you would have made while your business is out of action – plus any extra costs you incur to stay open.

It may also include:

  • Ongoing operating expenses, such as electricity and rent
  • Relocation costs for moving to, and operating from, a temporary location
  • Training costs for operators of replacement machinery
  • Closure of your business premises due to government-ordered street closures or curfews
  • Damage to a supplier’s premises which has a negative flow on effect for your business operations

 

What isn’t covered

There are exclusions. There is also often a deductible or excess and limits on cover, so check with your Steadfast insurance broker.

 

Case Study

Covering your costs when your business is out of action

Bills keep coming, staff need paying

Linda is the owner of a small office supplies business – with eight staff on the payroll and numerous suppliers.

Late one night, the restaurant next door catches fire and it spreads to her business premises – destroying the property along with the stock and IT systems. She’s unable to open the shop for weeks while the building is being repaired. Because the business isn’t operating, she’s not making any money – meanwhile the bills are piling up.

But with business interruption insurance, Linda banks an insurance payment, maintaining her cash flow at
pre-interruption level. Linda can continue paying her staff their regular wages, so they keep their jobs, and rents a temporary location so the store can keep running.