Business Interruption Insurance
Business Interruption Insurance needs to be considered hand in hand with Material Damage Insurance.
This insurance covers the financial losses which are a direct consequence of a Material Damage claim. Not all Material damage claims result in Business Interruption but all Business Interruption claims must be the direct result of Material Damage with a valid claim having been made and accepted by your insurers.
From a hairdresser's viewpoint, a serious fire may have the following effects:
- Immediate loss of, or reduction in, turnover and thereby profit to pay fixed charges and wages
- Loss of clients who will undoubtedly make alternative arrangements.
- Increase costs as you struggle to put the business back into a profitable position.
- Personal damage in terms of stress and worry.
The first three are insurable under Business Interruption cover. The severity of the fourth will be in many ways dependent upon having sufficient cover in place.
It can take time to rebuild a business after a serious fire. How long will Insurers continue to pay?
It's up to you! Twelve months is the usual period but if necessary longer periods can be arranged.
Calculating The Sum Insured Needed
Estimate the income from your premises for the next year. Deduct the cost of the purchases you will need to make and all those expenses that would reduce as a result of the reduction in turnover.