Business interruption insurance quotes from licensed Australian brokers

What business interruption covers

The policy responds when an insured event under your property cover stops or reduces trading. It is triggered by the property damage, so the two sections work together and a gap in one undermines the other.

• Loss of gross profit or revenue during the indemnity period
• Continuing fixed costs such as rent, wages, loan repayments and utilities
• Increased cost of working, covering temporary premises, equipment hire and overtime
• Claims preparation costs, so you are not doing the calculations alone
• Supplier and customer extensions, where a loss at their premises hits your trading
• Denial of access and utilities extensions on many wordings

The indemnity period is the decision that matters

The indemnity period is how long the policy will keep paying, and twelve months is the default that catches most businesses out. Twelve months sounds generous until you add up the time to settle a claim, clear a site, obtain development approval, rebuild, refit, recommission plant and rebuild a customer base. On a specialised manufacturing site that sequence can run to two or three years. Eighteen, twenty four or thirty six months are all available, and the additional premium is usually modest compared with the exposure.

Getting the sum insured right

Business interruption sums insured are calculated from your financial statements, typically on a gross profit basis defined by the policy rather than the accounting definition. That distinction trips up businesses that use their accountant's figure without checking the wording. The sum insured also needs to reflect the indemnity period, so a twenty four month period requires two years of gross profit, not one. Many policies apply an average or co insurance condition, so understating the figure reduces the claim proportionally.

Extensions worth asking about

Losses do not always start on your own premises. If a key supplier burns down, or your anchor customer closes, or the street is cordoned off after an incident next door, your revenue stops without any damage to your property at all. Supplier, customer, denial of access and utilities extensions cover these situations, usually with their own sub limits. Businesses reliant on a single supplier or a single major customer should treat these as core rather than optional.