Business Interruption Insurance

Protect your business against income losses due to physical damage to your property

Sometimes the unexpected happens, and when it does, having Business Interruption Insurance in place can ensure that your profits and income are protected.

If a fire breaks out on your business property, a storm causes operational downtime or a malicious break-in stops your business’ equipment from working, you could be forced to reduce or stop your work. This can lead to significant financial consequences. But with Business Interruption Insurance, you can cover these risks and mitigate their potential financial impact, giving your business the support it needs to get back up on its feet.

Key benefits of choosing CKI

  • Sound and impartial advice to get you the right insurance at the right price.
  • A direct line to a dedicated contact for all of your enquiries.
  • Expert knowledge of businesses and their needs to ensure you get the right level of cover.
  • First-class service that always exceeds your expectations.
  • Ongoing support throughout your time with us.

A great company that always delivers on those important things: ease of contact, customer service, price and knowledgeable and professional staff.

Bob Bellamy

Business Interruption Insurance FAQs

What is Business Interruption Insurance?

Business Interruption Insurance provides financial protection if your business is forced to stop functioning by an event that leads to physical damage or loss.

Business Building and Contents Insurance will help you to pay to replace, repair or rebuild things that are physically lost, damaged or destroyed. However, it won’t cover your loss of income or any other costs associated with forced inactivity. This is where Business Interruption Insurance comes into its own.

If your business is forced into downtime due to physical damage, it can help you to pay your workers, cover your drop in profits, pay the rent on an alternative location and even cover the cost of any loans you may have. This can help your business to cope with the difficult period of downtime before you can restart activity as normal.

What does Business Interruption Insurance cover?

Business Interruption Insurance typically covers events that damage your business premises or equipment, such as fire, floods or storms. They can also cover you if one of your suppliers or a neighbouring business suffers physical damage which then disrupts your own ability to trade.

To financially support you, the insurance can help you to pay for things such as a temporary move to a new location, operating costs, taxes and loan repayments. It will also reimburse you for the loss of profits and income.

Does Business Interruption cover COVID-19?

After the outbreak of COVID-19 and its development into a global pandemic, there was a great deal of confusion about whether Business Interruption Insurance would cover the loss of income as a result of employee illness and government lockdowns.

A Supreme Court judgement on 21 test cases did find that some policies needed to provide financial cover to their clients. However, this was dependent on the wording included in the policies.

The vast majority of Business Interruption Insurance will not cover COVID-19 or other contagious illnesses or viruses. This is because it is largely designed to cover the income lost when your business premises is physically damaged or if a supplier or neighbouring business is physically damaged, which leads to disrupted trading.

While the government lockdowns did make business premises inaccessible, because this was not due to a physical event, it was not covered by most policies.

Do I need Business Interruption Insurance?

Unlike Employers’ Liability Insurance, there is no legal obligation to get Business Interruption Insurance for your business.

Deciding whether to get Business Interruption Insurance is therefore dependent on the risks you perceive facing your business and their potential financial impact.

To help you decide whether it is something you need, take a look at this example.

Business Interruption Claim Example

You run a printing business, designing and printing point-of-sale signage and other marketing material for local and national clients.

An accidental fire breaks out overnight, destroying your machinery and some of the stock stored in the warehouse next door. The building is subsequently declared to be unsafe and you and your staff are denied access to it.

Financial implications include:

  • The loss of income from unfulfilled printing orders and the subsequent loss of contracts.
  • The need to pay staff to retain their skills for when your business is back on its feet.
  • The cost of temporarily relocating your business to a new base.
  • The cost of retraining your staff to use new printing machinery.
  • Needing to keep up with tax and loan repayments despite income and profits being affected.

In this case, because your business premises was physically damaged by an insured event, Business Interruption Insurance can step in to cover the loss of profits and income, while also helping you to pay staff, pay the rent of a temporary new location and keep up with other financial commitments.

What is the average cost of Business Interruption Insurance?

The cost of your Business Interruption Insurance will depend on the risks your business faces and the potential impact these could have on your income and your business’ ability to trade.

To find out more, talk to our team.

Contact Chris Knott Insurance for a
Business Interruption Insurance quote today on 01424 205009

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