Business Interruption Insurance - Who needs it?
There are lots of reasons why a business should have Business Interruption Cover, but basically it comes down to one main question.
If you had a large claim (fire or flood for example) and substantial damage was done to buildings or other assets, would this affect your ability to trade for a reasonable period of time?
If the answer is yes it would affect your ability to continue trading, you need to consider adding Business Interruption cover into your policy.
A company has stock and contents in their warehouse, which is due to be sent to customers. If there was a fire and the stock was destroyed, there would be little or no revenue coming in to the business - preventing it from paying the commitments it has and needs to keep going.
In the event of a loss, things that might need still need to be paid are:
Mortgage or Rent
Loans / Overdraft
Other Loans and Bills
Licenses and Subscriptions
Phones and long term contracts
And without Business Interruption cover you would have to rely on reserves to pay for these commitments until your property damage claim was resolved and you were able to repurchase the stock and other items needed for your business.
Without this cover, you might never recover even though you get paid out for your property claim.
Instead of full Business Interruption Cover, increased cost of working (ICOW) could help in the situation that if your studio or premises was damaged or destroyed, but you can continue trading at another location, this could offer financial assistance in maintaining a temporary location until you are back on your feet.
If you wish to discuss this valuable cover in greater detail please call us on 0800 216 962 or fill out our short form and let us call you.