Business Interruption
If your premises are damaged by a peril that you have insured against, the
Building and Contents insurance will cover the cost of replacing the physical
assets. However, your business is certain to be disrupted while you wait for
repairs or for replacement property. This in turn is likely to lead to reduction
in your turnover.
Business Interruption Insurance compensates you for this loss by restoring
the shortfall in:
a) your net profit
and
b) any fixed costs you may still incur despite your reduced turnover (e.g.
rent, wages or interest on a loan).
As in the case of physical property, your broker will be pleased to discuss
with you the sum you need to insure in order to allow for inflation and any
expansion in your business.
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