5 Reason You Should Have Business Interruption Insurance

What would your business do in the event of a loss

Most businesses insure against third party loss with public liability insurance, and most cover their asset with business insurance

In 2015 insurer CGU conducted analysis of policies placed with them by Steadfast Insurance Brokers across the property and business interruption classes, they found that 60% of the insured chose not to insure against interruption.

1. Your competitors will be happy to deal with your clients while the business is down

   • Where would your customers go if you can’t help them? How long would they wait for your business to get back on its feet and could you survive without if they didn’t return?
   • If your business employs real “stars”, how long can you afford to pay them while your business is down or is it likely when your business is back up and running they have found work with your competitors?

2. Your loss maybe out of your control

   • Recently a very successful jewellery shop suffered a major drop in it’s turn over after a fire in the shopping centre they were tenants in, the fire forced a change in location, that resulted in a massive loss of foot traffic.

3. Can you really just set up at home?

• If you’re a small administration service with less than 5 employees and you use the cloud to store all your documents.
• If you have enough computers at home for all you staff you maybe able to set up quickly.
• But for most businesses in the event of loss there maybe delays in access to the premises, there maybe delays in replacing equipment and you may have to seek local government approval to move your operation.

1. Your Local Government Won’t Rush Just For You

   • In the event of catastrophic loss your building may require rebuilding, there is no way to speed up that process
   • This is generally it is a two year process, without business interruption your business and its profitability may become critical.
   • In the event of a weather event like the Sydney Hailstorms and Perth Storms commercial property became scarce and expensive.

2. If your most important machine goes down how long would it take to get a new one?

   • Many businesses in Australia rely on products and machinery that is manufactured overseas and this can cause long downtime if replacement is required, some business interruption insurance  policies include options for paying for airfreight to reduce the downtime.

If you require advice on whether your business needs business interruption insurance or the amount of cover you need or the legislation in your state contact the team and talk to one of our brokers.