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What is covered under business interruption insurance

Feb 24, 2023
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Business interruption insurance in Australia is designed to provide coverage for financial losses that a business may incur as a result of an unexpected interruption to its operations. These interruptions can be caused by a range of events, including natural disasters, fires, theft, and equipment breakdowns. To know what your business interruption insurance covers you specifically for, it is best to talk with your insurance broker. Or alternatively, if you don't have an existing insurance broker, connect with one today and undertake an insurance review to determine your current and desired levels of coverage for business interruption.

Here are some of the key coverages typically included under business interruption insurance in Australia:

Loss of income: This coverage is designed to reimburse a business for lost income during the period of interruption. Your business interruption insurance policy may pay out for a predetermined period, such as 12 or 24 months, or until the business can resume normal operations.
Fixed costs: Business interruption insurance may also cover fixed costs such as rent, utilities, and other ongoing expenses that the business still has to pay, even if it is unable to operate.
Additional expenses: This coverage is intended to reimburse a business for additional expenses that it incurs during the period of interruption, such as the cost of renting temporary premises or hiring additional staff.
Contingent business interruption: This coverage is designed to protect a business against losses caused by the interruption of a key supplier or customer.

It's important to note that business interruption insurance policies can vary widely in their coverage, so it's important to carefully review the policy details and consult with an insurance broker to ensure that you have the appropriate coverage for your business needs.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

ADVISR, ABN 17 613 588 266