Business Continuity Planning: Keeping your business booming
As a business owner you’re probably well aware of the ‘what if’ scenarios you faces on a daily basis. If you are a designer or web developer you may have backups of your work stored in the cloud coupled with a spare laptop to use just in case yours develops a fault. Or if you run a shop you may have a backup till or card reader to call on just in case your day to day device stops working. These are reasonably affordable measures to make sure you can carry on trading in the face of uncertainty. But if you find yourself without a shop or office because of flood, fire or a myriad of other reasons, you are unlikely to have a spare buildings lying around.
When arranging insurance it’s always important to look beyond the immediate physical loss and think about the long term effects. How are you going to protect your cash flow and profit? If you need to relocate and have to pay your staff extra expenses, who will cover these increased costs of working? And when you trade from a bricks and mortar premises, especially if you have specialist equipment found in a salon or a deli, you can’t just pack up and move in the event of the unforeseen. So how are you going to ensure that you don’t suffer an on-going financial loss should you need to claim?
Business interruption (or BI cover) is what you need to make sure you’re not caught out in this situation. BI cover aims to maintain a business’s income even if they are unable to trade for a period of time after an insured incident has occurred, and helps get a business back on their feet.
For example say you are a florist that suffers a fire destroying part or all of the premises. It could be a number of weeks or even months before your premises are repaired, equipment is restored and you can start trading again. In this time your regular clients may well have found another supplier.
Whilst you are not able to trade at your current location business interruption cover can fund an alternative location and provide you with the profits you have lost and ensure that all of the normal business expenses (such as wages, loan payments and mortgage or rent) are paid. This then allows you to get on with the process of rebuilding your business. The policy will carry on paying until you are back in the financial position you were in before the loss occurred – up to the limit of your indemnity period.
So it may well help fund the florist for an alternative location to ensure the customers keep on coming, or alternatively it can provide the profits until the owner can win back old and new customers to the previous trading level.
If in doubt, why not call us and have a chat. We can advise on what sections of Business Interruption cover can be added to your policy and will be appropriate for your particular needs. Always happy to listen and make it crystal clear to you exactly what you’re paying for and why.
Let’s make sure we have done all we can to keep business booming!