Business interruption insurance: a guide for small businesses #StartUps - The Entrepreneurial Way with A.I.


Friday, April 3, 2020

Business interruption insurance: a guide for small businesses #StartUps

What events does business interruption insurance cover?

As Rick Smith, managing director of insolvency specialists Forbes Burton, notes: “Most business owners think their business interruption insurance will cover them for any scenario. Indeed, they may not have even asked or been told about specifics”.

Needless to say, you won’t be covered for every scenario.

The range of events covered by business interruption insurance depends always on the particular policy, but the events most commonly covered include:

  • Fire
  • Flooding (although details can vary: some policies will cover flooding due to a burst water main, but not a river bursting its banks, for example)
  • Storm damage

Other events that may be covered include:

  • Vandalism
  • Cyberattacks
  • Equipment failure
  • Failure of public utilities

As covered in detail above, you may also be covered for the impact of infectious diseases like the coronavirus, but the limitations of this cover depend on the wording of the policy.

Some insurers, such as Hiscox, provide detailed guidance on what is and isn’t covered online, while others will only give you this information if you contact them directly.

A word of warning – don’t assume that the potential impact of these types of dangers are covered by your other business insurance policies.

As Michael Foote, the founder and managing director of insurance comparison site Quote Goat notes: “Unfortunately, too many businesses incorrectly believe that their building or contents insurance will keep them covered and solvent in the event of an interruption.”

These policies will cover the loss of stock/equipment, and the cost of repairing damage to the premises, but will not cover the potentially severe financial impact of your business being disrupted.

For that, you need business interruption insurance.

via by Alec Hawley, Khareem Sudlow