Whether we like to admit or not, life is unpredictable, and even when we think we’ve got it all under control, we don’t. When you get into the business sector, managing your own business, this is the last thing you want for this valuable asset of yours, including your financial future.
Luckily, help comes in the form of business interruption insurance policy. Trying to get a hold of the financial books, paying attention to productivity, and efficiency, this sort of investment is often overlooked because it’s considered rather an expense. Fact is this isn’t just any type of property insurance, as it covers both the physical business damage, and the profits that would have been earned. It’s needless to say cash flow is essential for any business, which is why it’s important to get the cash flow protection to ensure fast recovery in case of catastrophe.
What this means is if something happens, in the likes of fire, flood, hail, cyclone, earthquake, terrorism, or actions by civil authority, even if your equipment and stock have been destroyed, or you have no access to your premises, business interruption insurance policy makes it possible for your business to continue immediately (not in the next six months, or year’s time), enabling you to go on with paying wages, meeting loan repayments, repaying creditors, paying out rent, as well as fixed personal expenses.
It’s a policy that keeps your business up and running even in the case of an accident, and that’s what makes it such a significant investment; if you want your business to survive, you’re advised to get this insurance coverage. Since there is a variety of options on this insurance policy, it’s best to rely on the help of a broker, specialised in business interruption insurance, who can do the calculation on the correct sum insured, taking your specific risks into account to tailor the policy properly for your business.
For example, the price of the policy covering up the risk of fire is going to be greater at a commercial kitchen, than at an accounting office. Likewise, it also depends on the ease of operation of the business at another location (based on inventory) – accountants can continue with work relocating elsewhere faster than cooks.
When it comes to the length of period of business interruption payments, it’s a decision you have to make based on several aspects. For instance, it’s important to have in mind on how fast it would take you to find a new location, or whether or not you want to stay in the premises and how long it would take you to re-build. You also have to think in terms of machine damages, period of machinery replacement, as well as the period of new stock arrival. So, think well, and make this financial step to insure your valuable asset.