If we talk about suffering a major loss at your premises, you will most likely think about your assets – buildings, plant, machinery, stock etc. If you didn’t insure them, how could you continue to operate? Knowing that if a significant loss were to occur, you would get all of your physical items replaced meaning you could start to operate again. But is this enough? Will you still be trading?
After a major loss, many companies do not recover as they still have outgoings to pay and income may have completely stopped. One of the most significant parts of your insurance is the business interruption section. Business Interruption Insurance (BII) can cover the loss of profit you have suffered up until you are back to the same financial position you were before the loss, not just until you are up and running again.
Having BII may not be enough. Too many times we see prospective clients with inadequate indemnity limits (length of cover). When you start to rebuild your property after site clearance, architectural plans, planning permission etc. it could take up to a year to rebuild! If you have to reorder a piece of machinery from abroad, how long will it take to reach you? Will you have lost your clients to competitors during this time? Again, bear in mind the cover is until the business is financially back to the same position you were at before the loss, not just until you are back up and trading.
A few of the things you need to consider when looking at your BII limits are as follows:
- Pre-rebuild – investigation time, planning permission, site clearance.
- Rebuilding the premises – listed buildings or conservation areas, trade body approvals for fit outs, sourcing rebuild materials.
- Rebuilding the business – machinery lead times and installation, contract lead times, suppliers of stock, loss of clients.
Business Interruption is one of the most important covers to help your business recover if you suffer a major loss. Please contact your account manager or a member of our team if you would like to discuss further.
Doncaster 01302 341344
Sheffield 0114 243 9914
By Rachel Storey DipCII – Account Executive