It's really a simple question – how can you meet your business expenses when your income disappears? Yet so many business owners aren't insured for business interruption and loss of profits, either because they don't know about the product or worse still, decide they'll never need it.
It's a frightening statistic, but over 50% of companies don't have business interruption insurance.*
There are thousands of case studies that demonstrate how vital this cover can be to protect the future of your business. This Sydney-based retailer is a classic example.
When an extensive fire raged through the automotive accessories store, its entire stock was completely destroyed. What's more, the building and fit-out was severely damaged and in the clean up process, asbestos was discovered which involved the Environmental Protection Agency and further delayed the timeframe for a clean up.
The interruption to normal business was sudden, dramatic and total.
Revenue for this once thriving business ground to a complete halt. Yet the expenses faced by the enterprise hadn't ceased for a second. There were wages to pay, rent, utilities, suppliers... suddenly the list of outgoings seemed endless.
Thankfully, the owner had taken out a business interruption policy some time earlier. Like so many proprietors, they had never imagined they would actually use this cover.
Now faced with a growing list of expenses, the owner's mind was put at ease when their business interruption policy kicked in. Further payments were used to finance the purchase of replacement stock.
Their insurance policy will continue to cover the loss of profits of the business while the business is closed.
The purpose of business interruption insurance is to ensure the financial position of a business returns to where it was before the loss. You need to have a property policy to be eligible for business interruption insurance and the damage incurred must be of the type that would be covered under that property policy.
For this retailer, it prevented an already devastating fire from turning into a financial disaster.
Important note: * Cameron Research Group 2010: The Australian Small Business Market for Financial Services ‘Insurance and the Small Business Market'
It's a frightening statistic, but over 50% of companies don't have business interruption insurance.*
There are thousands of case studies that demonstrate how vital this cover can be to protect the future of your business. This Sydney-based retailer is a classic example.
When an extensive fire raged through the automotive accessories store, its entire stock was completely destroyed. What's more, the building and fit-out was severely damaged and in the clean up process, asbestos was discovered which involved the Environmental Protection Agency and further delayed the timeframe for a clean up.
The interruption to normal business was sudden, dramatic and total.
Revenue for this once thriving business ground to a complete halt. Yet the expenses faced by the enterprise hadn't ceased for a second. There were wages to pay, rent, utilities, suppliers... suddenly the list of outgoings seemed endless.
Thankfully, the owner had taken out a business interruption policy some time earlier. Like so many proprietors, they had never imagined they would actually use this cover.
Now faced with a growing list of expenses, the owner's mind was put at ease when their business interruption policy kicked in. Further payments were used to finance the purchase of replacement stock.
Their insurance policy will continue to cover the loss of profits of the business while the business is closed.
The purpose of business interruption insurance is to ensure the financial position of a business returns to where it was before the loss. You need to have a property policy to be eligible for business interruption insurance and the damage incurred must be of the type that would be covered under that property policy.
For this retailer, it prevented an already devastating fire from turning into a financial disaster.
Important note: * Cameron Research Group 2010: The Australian Small Business Market for Financial Services ‘Insurance and the Small Business Market'
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