For whom is business interruption insurance useful?
A business interruption insurance is particularly interesting if you are dependent on your business premises and any equipment or machines. After the damage, it may take a while before you can continue with your business. Your property may need to be refurbished or rebuilt, maybe the area needs to cleared, or you may have to apply for permits from the municipality. During this time, you will be unable to (fully) continue with your company, which results in turnover loss.
Is business interruption insurance mandatory?
Business interruption insurance is not mandatory.
What is insured with business interruption insurance?
Loss of turnover when your company closes after damage.
Read the policy conditions
The conditions of your insurance policy depend on your insurance company. These are written in the policy conditions, which you should always read carefully. You can ask an independent insurance advisor for advice.
When does a business interruption insurance pay out?
If your policy states that you are covered for what happened to you. Common cases are:
- fire, water damage, storm, vandalism, or theft
- street or shopping center closure due to damage to other buildings
- closure of your business due to soil contamination or asbestos
What is usually not insured?
- less turnover because your customers place fewer orders
- damage to your property. Take out buildings insurance for this
- damage to your inventory. For this you need to take out inventory insurance
- damage to goods or stock. For this you need to take out goods insurance
- damage caused by intent
- damage caused by poor maintenance
- damage caused by illegal activities
- damage caused by natural disasters, such as earthquakes and floods
Many insurers allow you to combine various casualty insurance policies. This insures you for multiple damages at once. In this case you often pay less premium.
How long can you receive benefits?
This depends on your policy conditions. The benefits usually stop when your building has been rebuilt or when your production and turnover are back to how they were before the damage. The maximum period to receive benefits vary from 6 months to several years. Also think about how you can limit other business risks.