The importance of business interruption cover for SME’s
The journey through the first 3 years, or 1001 days of a start-up business is a mix of good and bad days. To make it through the bad ones – the days when delivery vans crash or stock gets stolen – you need an insurer that understands the importance of keeping your business in business.
Business insurance can provide protection that will ensure your business will survive, and even thrive, through the ups and downs. Be it theft, damage or legal liability you may incur for damage to property or injury to others, or the type of damage to property that affects your business’s ability to function at 100% and to lose income, insurance is there to make sure that these are only temporary setbacks.
For example – a restaurant’s kitchen was left ruined after a fire that started in the early hours of the morning. As the restaurant was dependant on the kitchen for normal operations, it was forced to close its doors. This inevitably meant no income was received during the repairs period - however overheads such as rent, electricity, water, staff salaries and payments to suppliers remained due at the end of each month. Added to this were the actual costs of repairing the damage to the kitchen.
In short, if the restaurant did not have business insurance it is unlikely it would have survived the financial impact of the incident.
This is why business interruption cover should be seen as a vital part of a continuity plan for a business. It insures you against the loss of profits or revenue, to enable you to pay overheads, assisting a business to return to the same financial position it was in prior to the incident – in other words – it’s what helps a business get back on its feet.
Because if a business is going to make it to day 1001, it can’t afford to get caught up on day 283, 416 or 898, or any other day for that matter.
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