Rebuilding after a fire is only half the recovery. While the doors are shut, the income stops but the rent, salaries and loan instalments do not. Business interruption insurance keeps a company financially alive through exactly that period.
What business interruption insurance is
Business interruption (BI) insurance — also called loss of profit cover — replaces theincome a business loses, and the fixed costs it must keep paying, when operations are interrupted by an insured physical-damage eventsuch as a fire. It operates alongside the property policy.
Why property cover alone leaves you exposed
What it covers
- loss ofgross profitduring the interruption;
- fixed and standing charges— rent, salaries, utilities, loan servicing;
- increased cost of working— extra costs incurred to keep trading; and
- defined wages, where included.
The concepts that decide your claim
| Gross profit basis | Turnover less specified variable costs — the figure BI protects. |
| Indemnity period | The time allowed to fully recover — often 12, 24 or 36 months. |
| Time excess | A short waiting period before cover begins. |
| Increased cost of working | Extra spend to reduce the loss, subject to the economic-limit test. |
Extensions worth considering
- Supplier and customer extension— interruption caused by damage at a key supplier or customer;
- Denial of access— loss when authorities or damage nearby prevent access to your premises;
- Public utilities— interruption from failure of power, water or telecom supply; and
- Increased cost of workingas a standalone where physical BI is limited.
Who needs it
Manufacturers, hotels and restaurants, retail, and any premises-dependent business with significant fixed costs and income that stops if the premises do. The more a business depends on a single location, the more essential BI becomes.
Getting the sum insured & indemnity period right
Two mistakes recur: understating gross profit, and choosing too short anindemnity period. Recovery from a serious loss — rebuild, re-equip, win back customers — often takes far longer than owners expect. The indemnity period should reflect a realistic, worst-case recovery, not an optimistic one.
What it does not cover
Typical Exclusions
- •interruption not caused by insured physical damage;
- •pandemics and notifiable disease, which are largely excluded following recent market changes;
- •loss of market or goodwill unrelated to the physical event; and
- •uninsured perils under the underlying property policy.
How Aurevian helps
Aurevian helps youcalculate gross profit correctly, set a realistic indemnity period, add supplier/utility extensions, and manage a BI claim— which is forensic and records-driven — so the cover actually carries your business through to recovery.
“Insuring the building is insuring the past. Business interruption cover insures the future you were trading towards.”
