When a large-scale accident happens, it can have an effect on your business for several months, even years. Buildings and material damage insurance will cover the risk of physical injury but will not cover the potential financial effect of the incident.
For example, if a company is subject to a fire that makes the premises unusable, it would have to pay the cost of:
- Loss of trade to competitors – if a company is closed for a substantial length of time, even the most loyal of customers will look elsewhere. The reduction in income can be seen for months after trading has commenced again.
- Reduction of income while repairs are carried out in the premises
- Ongoing costs while unable to trade, e.g. mortgage repayments; Employee salaries or the expense of hiring new employees after they have been reopened
- Advertising expenses to re-launch the company
Business Interruption looks beyond the immediate risk an event poses and instead looks at the longer-term impact on your business. Policies can also be extended to cover:
- Loss of Attraction – certain incidents can cause a reduction of footfall in the following months. Even when your business is not directly involved, it can still impact your income.
- Incidents that are not caused by substantial harm to the premises but which restrict access
Damage occurring at the supplier’s premises – if you rely heavily on a single supplier for products that are not readily available elsewhere, it can have an effect on your business.
- Harm happens at the customer’s premises – if much of the business is done with a single client and it is not possible to do so.
For more information contact us today