Get the facts about Business Interruption Insurance
Recent research from the Small to Medium Enterprise (SME) business sector showed a significant number of businesses have no business interruption cover.
What happens to the business, if the premises are destroyed as a result of a major fire, storm or an unforeseen situation?
What happens if the business simply cannot trade?
What if you can’t trade for 12 months?
Research tells us that the reason people go into business in the first place is to:
We also hear that for some businesses it’s the superannuation plan for the owners.
If cash is not coming in, because of an interruption it will be very difficult to continue business. How will you pay the rent, wages, overdrafts, together with other business expenses?.... They still continue.
Experience tells us that 70% of businesses that have a major loss do not get back into business following that loss.
Will your business survive?
Will you lose your customers to competitors over this period?
There are also your employees to consider. What would happen to them?
If you are in business for any of the above reasons, and have not protected your investment with Business Interruption cover, and an insured event occurs, statistics suggest you will lose your lifestyle, opportunity to sell and capitalise on your hard work, or lose that retirement super plan.
Business interruption cover (also know as Loss of Profits cover) provides cover for the loss of income a business suffers following an insured event to your insured property, meaning you still have money coming in, even though your business is not trading due to an unexpected loss.
It’s that simple.
Here’s a real life example of how business interruption insurance saved this small business.
The insured owned a general store and private residence within the one building. A fire – caused by an electrical fault in the wiring – started in the private residence and soon spread to the general store.
Extensive damage was sustained and it was expected it would have at least 12 months before the general store could recommence trading.
The client had recently updated their business interruption insurance and was insured for $225,000 for Gross Profit.
This meant that the client received payment for lost profit which helped them pay their bills and allowed the owners to have a steady income while their business was rebuilt.
Without business interruption insurance the general store may not have been able to recover.
Can you really afford not to have business interruption cover?
For a relatively inexpensive cost you can have the peace of mind of knowing that if something goes wrong, your business and the reason you are in business will be protected.
As always, we recommend that the specific needs of our business be discussed with us and that you consider the product disclosure statement in respect of any business interruption insurance policy before making your decision in relation to this product.