To put it simply, Business Interruption insurance protects against loss of profit resulting from an interruption to your business activity. Interruption to your business activity has to be caused by an insurable event such as Fire, Storm, Accidental Damage, Machinery Breakdown or other events you are insured against as stated in your business policy.
Common problems suffered by businesses as a result of interruption include:
- loss of profit margin on stock destroyed;
- non-fulfilment of standing orders;
- breaking of contracts and / or loss of customers to competitors;
- certain continuing expenses, for example, rent, payroll, interest;
- additional expenditure in order to minimise loss of income, like rental of temporary operating premises, or working additional shifts;
- the availability of replacement plant and machinery or parts for damaged plant and machinery;