Business interruption insurance is crucial for protecting your organisation against unforeseen perils that could prevent you from operating as usual.
Finding the right policy to fit your specific needs is important, so let's run through the various factors you should consider when seeking cover.
Where do I start?
You need to ask yourself a few questions to get the ball rolling. For example:
- How long would my business take to get running again after a worst-case scenario claim?
- Would we still be able to operate while our primary premises were being rebuilt?
- Do we have other ways to minimise downtime to prevent client or customer churn?
Once you have a rough idea of the answers, you can begin to determine what level of cover you require, as well as the preferred indemnity period.
What is the ideal length of cover?
Organisations typically opt for 12 months as a default indemnity period, but this may not be enough time to recover from a major catastrophe.
Would you be able to clear a site, get new plans through the council, rebuild a property and get the business trading at the same level as before – all in one year?
Every organisation is different, but MGA Insurance Brokers usually suggests a 24-month indemnity period as a minimum for peace of mind.
What is usually covered within the sum insured?
Comprehensive business interruption insurance needs to cover a number of areas where you incur losses after an incident. These include:
- Gross profits;
- Wages and payroll;
- Increased costs of working;
- Claims preparation costs;
- Book debts; and
- Gross rentals.
Organisations face unique risks depending on their location, size, industry and other factors, so ensure your business interruption cover is tailored specifically for you.
How are claims assessed?
Business interruption claims can be complex. Your needs are likely to evolve throughout the claim, as timeframes are confirmed for premises rebuilding, machinery supply and re-establishing the business.
Ideally, your claim should be assessed within 24 to 48 hours of the business interruption event. If you have claims preparation included in your cover, professional claims preparers will work alongside your broker to facilitate the process.
After you make a claim and it's accepted, your broker and claims preparer will work with the insurer to ensure you receive an initial payment very shortly after the loss event occurs. Subsequent payments will be made as needed throughout the indemnity period.
"Brokers will apply for quotes through various insurers on their business packages to find the ideal product for your needs."
How can a broker help?
Experienced insurance brokers can guide you through all the steps required to ensure you are adequately covered for catastrophic events that interrupt business as usual.
Matthew Ward, a broker with MGA Insurance Brokers, says professional brokers work closely with the insured, as well as their accountants and claims preparers, to ensure that the financial aspects of the client's business are covered though business interruption.
"Brokers will obtain quotes through various insurers on their business packages to find the ideal product for your needs," he explains. "We also have access to specialist insurers that provide business interruption insurance as a standalone product, which can often be a more suitable solution for some clients."
Would you like to discuss your business interruption cover requirements? Contact MGA Insurance Brokers today.