Do you need Business Interruption cover?

Have you thought about what would happen if your business had to close for three months following a disruption such as a major fire or storm?  Would your business survive?

A recent survey of nearly 500 small businesses, conducted by CGU, found that one in four businesses would not survive if they had to close their doors for three months. The survey found that a quarter of small businesses would have to shut down if they experienced a business disruption such as a major fire or storm and this figure jumped to 38 per cent if the shutdown happened during a busy period in the year for that business.

Perhaps the most striking finding was that one in seven businesses experienced a shortfall in income because of a business interruption in the past 12 months. Despite these findings, less than a quarter of business owners surveyed actually had business interruption insurance.

Business interruption insurance covers the shortfall in gross profits caused by the interruption to a business from insured events, helps pay ongoing costs and protects profit margins until the business is back on its feet and back at its profit level before the interruption.

Business interruption insurance can:

  • Give you peace of mind. Business interruption insurance provides the safety net you and your family need should the unthinkable happen. With business interruption insurance you can rest easy.
  • Keep you afloat while you wait for plans to be drawn up or council permits to be approved when rebuilding.
  • Cover the costs of finding and fitting new premises, advertising to let your customers know you have moved and when you’re fully open for business again.
  • Ensure you are able to continue to pay and retain key staff while the business gets back on its feet.
  • Cover interruption costs to your business such as suppliers not supplying, key customers unable to purchase your goods or when power or gas outages limit your ability to do business.

Realistically, any business interruption could be a major setback for a small business, particularly in the current economic climate, where margins for many operators are already tight.

Contact one of our friendly advisers for more information on 1300 799 422.