Business Interruption Insurance

If you are a business owner, you no doubt rely on a steady income from your operations, so how would you cope if your business was suddenly unable to operate? Many businesses would find it a considerable struggle – indeed around 43% of businesses that experience a disaster never re-open due to the income lost. Business Interruption Insurance could help protect your Business.

The bills do not stop arriving after the fire brigade leaves after a fire, or when a storm passes, or floodwaters subside. How long can your business survive without revenue to pay your on-going expenses? If you have Business Interruption insurance, the financial risk and associated stress is taken away from the business, its owners, managers and employees as it has been transferred to an insurer.

Who is it for?

Business Interruption insurance can provide broad financial protection for a range of small to medium sized business types and occupations including (but not limited to):

  • health food shops
  • pet shops
  • fruit and vegetable retailers
  • Electrical Retailers
  • Travel Agents
  • Hairdressers and Beauticians
  • Restaurants and Cafes
  • Motor Mechanics
  • Clothing retailers
  • handbag stores
  • florists
  • Manufacturers

What does this insurance cover?

Business Interruption insurance is designed to put the Insured back in the same position, as near as money will allow, to that which they would have enjoyed but for the loss.

Most business interruption insurance typically covers:

Profits: Based on previous monthly performance, a policy will generally provide reimbursement for profits that would have been earned had the event not occurred.
Fixed costs: These can include operating expenses and other incurred costs of doing business.
Temporary location: Some policies cover the costs involved with moving to and operating from a temporary business location.
Commission and training cost: Machinery may need to be replaced and staff trained how to use the new machinery.
Extra expenses: Reimbursement for reasonable expenses (beyond the fixed costs) so the business  can continue operating.
Business that attracts customers: Damage to property of a major tenant, if your business is located within a multi-tenanted retail shopping complex and the damage results in a reduced pedestrian count in the shopping complex.
Employee wages: Coverage of wages while shutting down, helping the business owner make  payroll.
Taxes: Businesses are still required to pay taxes, even when disaster hits. Tax coverage will ensure a business can pay taxes on time and avoid penalties.
Loan payments: Coverage of loan payments even though the business is not generating income.

What usually isn’t covered?

Declared Pandemic, COVID-19, Avian Influenza or as declared under the Biosecurity Act 2015. You cease to be in business or are declared bankrupt or placed into administration. We recommend that you read the insurer’s PDS to obtain full details of coverage.

Contact Riverina Finance & Insurance Solutions

For more information or to arrange cover for you or your business, please contact us and speak with one of our advisers.