Business Interruption Insurance for SMEs

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Business Interruption Insurance for SMEs

Australian businesses are operating in an increasingly volatile and unpredictable, environment.  In the face of such uncertainty, it’s important to ensure your business is fully protected now and into the future.  One of the best ways to do this is to secure a comprehensive Business Interruption Insurance policy.

What is Business Interruption Insurance?

Business Interruption Insurance covers loss of income due to disastrous events that directly affect your business. It’s designed to protect you from horrendous setbacks and potentially snowballing financial issues.

Most Business Interruption Insurance policies cover similar things.  The most commonly covered situations include:

  • Profits that your business otherwise would have made.
  • Fixed expenses.
  • Relocation costs.
  • Training costs for new employees.
  • Other expenses – within reason of the operation.
  • Circumstantial closure of business – if enforcement is government-related.

Why Should I Have Business Interruption Insurance?

Business Interruption Insurance really is a saving grace for SME’s.

Losing a customer or two to your competition could be the least of your problems in a time of disaster. It can’t be emphasised enough… Business Interruption Insurance so imperative, it should almost be made compulsory.

Think an additional premium is expensive? Think about these questions instead.

How much are you prepared to lose? And;

What is your strategy for income replacement?

Optimizing The Benefits of Your Business Interruption Insurance

Simply taking out a policy isn’t enough. Inclusions must be agreed upon, and you should ensure the correct indemnity period is specified.  An accurately estimated indemnity period allows you to maximise the compensation you’ll receive should you ever need it.

It’s important to include absolutely every expense possible in your calculated time period.

Some things you could consider are:

  • Seasonal considerations
  • Equipment repair – ordering, delivery lead times for spare/new parts
  • Building/property repair

In most cases, it’s recommended to submit a slightly overestimated figure to be on the safe side.

Business Interruption Insurance is undoubtedly a requirement for just about any business. There have been an abundance of cases where businesses have unfortunately collapsed due to either naivety, (thinking it won’t happen to them), or underestimation.

While other policies will cover property and contents, Business Interruption Insurance is often the policy that kicks in to restore your wellbeing and gets you back on your feet. This type of insurance cover can save you from circumstances such as living without income, or in extreme cases, bankruptcy.

Business Interruption Insurance is not to be taken lightly. Don’t get caught out, and make sure you’re covered.  Speak to PSC Insurance Brokers today for more information.

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.