When businesses experience a major insured event, the physical damage is often only part of the story. The loss of income while operations are disrupted can have an even greater financial impact.
Business Interruption Insurance is designed to help businesses recover by covering financial losses that occur while normal trading is affected following an insured event. This may include lost revenue, ongoing operating expenses and certain additional costs incurred to keep the business functioning.
One valuable feature is Additional Increased Cost of Working (AICOW). This cover can assist with reasonable expenses incurred to reduce the impact of an interruption and help the business continue operating while repairs or rebuilding take place.
For example, AICOW may help fund temporary premises, storage facilities, replacement equipment, additional labour or overtime, and advertising to inform customers of a temporary relocation. These expenses can be critical in maintaining customer relationships and minimising long-term disruption.
Many businesses underestimate how long recovery can actually take. Delays in rebuilding, obtaining approvals, sourcing materials or replacing specialised equipment can extend downtime well beyond initial expectations.
Selecting an appropriate indemnity period and regularly reviewing Business Interruption cover helps ensure the policy reflects the realities of the business and today’s economic environment.
Business continuity is about more than repairing physical damage. It’s about ensuring your business can survive financially while getting back on its feet.
If you would like to review your Business Interruption Insurance or discuss whether your current cover remains appropriate, contact Ponton & Co. Insurance Brokers.
