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Understanding business interruption

Business interruption insurance covers loss of turnover, and the costs of temporary relocation, if your business cannot trade due to damage to your equipment or premises.

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Preserving your business continuity

When you run your own business, you’re in charge of your own destiny. You make the big decisions, you work the hours you choose and you’re responsible for the health of your profit margins. But there are some things, like natural disasters and accidents, that no-one can control.

So, while you cannot predict the future, it’s important to be ready for whatever life throws at you. Business interruption is a valuable tool for maintaining your continued financial stability in the face of insured events such as fire, flood and theft, and it can ensure your business’s survival even if it has to cease trading for a while.

What is business interruption insurance?

There are lots of different things that could halt your business’s work: your premises might be broken into and ransacked, an electrical fire could destroy your office building or a burst water pipe could damage all your furniture and office equipment.

Fire, theft and flood are the more common issues covered by business interruption. But there are other potential issues too, such as the failure of public utilities, damage to neighbouring property that prevents access to your premises, and even bomb scares. All of these scenarios could result in you being unable to trade but they won’t necessarily result in damage to your property. Situations like this are usually covered as extensions to business interruption cover.

Following an insured event, business interruption can cover the loss in turnover that you incur while trying to get your working life back on track. It can also cover your expenses while you set up your business in a new, temporary location.

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or call us on 0345 878 5603

How much does business interruption insurance cost?

The price of business interruption cover varies according to the specific needs of your business. To get your business interruption premium, use our online quote tool to get a full breakdown of all the insurance you can add to your policy. All you need to do is answer a few questions about you and your business and we’ll do the rest.

Why do I need business interruption cover?

Although you might have insurance that covers the repair of your premises and equipment in the event of damage, this insurance will not cover you while you get your business back to trading normally. This is especially important to consider, as things like flood and fire damage can sometimes take months to fully repair.

You also have to pay your employees if you want to retain their services for when your business is back up and running. Most small businesses simply cannot afford to lose that much time, money and turnover. Business interruption is often referred to as loss of earnings insurance or loss of income insurance and is a vital safety net for companies that would otherwise have to cease trading for good.

It is also worth considering your customers, especially if you work in retail. Many small businesses depend on repeat custom and if you’re out of action for any length of time, your customers could start looking elsewhere.

Business interruption also helps you relocate somewhere suitable for all your newly replaced stock and equipment whilst your premises are being repaired. This means you can be back to normal and trading sooner than you think.

Get a quote
or call us on 0345 878 5603

Does Direct Line for Business offer business interruption cover?

You can add business interruption to your Business Insurance policy if you have selected buildings, contents or property away cover. All you need to do is use our online quote tool and choose business interruption as one of your options.

Here are some of the benefits of our business interruption cover:

  • We cover you for loss of turnover if you’re unable to trade because of an insured cause, like fire or flood damaging premises, equipment or stock.
  • We can cover your different places of work, including your office, home, a rented pop-up or a market stall. We’ll cover the extra costs of moving elsewhere.
  • If you sell things at fairs or exhibitions and the venue has to close due to fire or flood, we can cover your loss of turnover.
  • If one of your key clients or suppliers suffer an interruption to their business, and this has a knock-on effect on yours, we’ll cover your loss of turnover.
  • Our business interruption cover can insure you if you or one of your key employees becomes seriously disabled and is unable to continue work, we will cover the incurred costs up to £25,000 to minimise any interruption to the business.

Do I have to have my property insured to have business interruption cover?

If you want to take out business interruption cover for a property that you own, you need to also insure the property with us. This is because in the event of damage, it ensures funds are available to repair or replace items, therefore reducing the time it takes for your business to resume full trading.

What is an indemnity period?

This is the period of time that business interruption will pay out to the policyholder after a claim has been made. The period usually starts from the date of the incident you’re claiming against. When choosing your business interruption cover, you have to estimate how long you think it would take for your business to get back to normal trading in the event of your premises being totally destroyed.

How can we help?

Get a business insurance quote by searching for your profession above or calling us on 0345 878 5603.

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