Business Interruption covers your financial loss after you’ve experienced property damage and a reduction in trade. In other words, it keeps the money coming in whilst you get back on your feet. Importantly, Business Interruption cover is only triggered by an event that is covered by your property insurance policy so if there’s no property cover then you automatically won’t be covered for Business Interruption either. For example, if your property insurance excludes flood then you won’t have any Business Interruption cover for flood events either.
This type of cover is one that we consider most important because there are so many bills that keep on coming even if you aren’t trading. You have staff who may have families to feed. And mortgage payments still need to be paid. These are the types of “fixed costs” that should be insured under a Business Interruption policy.
Dr Allan Manning of LMI, an insurance industry leader particularly in the field of Business Interruption, has determined that:
“over 90% for businesses examined in [his] doctoral research, who did not have business interruption insurance failed within two years, some as quick as 2 weeks after the fire”.
For further information and statistics re Business Interruption and why you need it, please follow this link to LMI: http://cms.lmigroup.com/bi-explained/au/it-will-never-happen-to-me/