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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:
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.