Business interruption cover

When something goes wrong with your business, you don’t just face the costs of mending or replacing damaged property. You may also lose income or profit from your business while you sort the problem out. And you’ll face all sorts of additional expenses – from accountants’ fees to hiring temporary premises to cleaning costs. Business interruption insurance covers you against loss of business income or gross profit due to events covered by your business insurance – for example, fire, flood or theft. The amount you’ll get is calculated from your gross income that you lose following the damage.

It can also cover for loss or damage to books or records of account at your premises that make it impossible for you to recover customers’ debts. This is known as Book Debts cover.

Who needs Business interruption insurance?

If your business premises or equipment were damaged, would your business carry on as normal? If you lost your stock, or weren’t allowed access to your premises, would it affect your business?

And if you had to move premises and start again, would it be days, weeks or months before you’d be up and running again? Even if your buildings and contents are insured, the loss of business income and the cost of setting up your business again could be crippling.

If your business relies on any specific property or equipment, then you should think about business interruption insurance.

Our business interruption insurance

All of our policies include business interruption insurance (and Book Debts cover) as standard.

Some examples

You run an IT consultancy from an office. A fire destroys your office and damages valuable equipment and records. It takes you a week to get your business running again. Not only do you lose a week’s business, but you also have to pay your staff and cover expenses while you are getting a new system up and running.

You sell fruit and vegetables. You use a single supplier, and their warehouse suffers a fire and they can’t supply you with any stock. You lose money until you find a new supplier or they are able to supply you again.

You run a photography studio on a trading estate. One of the other properties on the estate catches fire, and the estate is closed for two days while the fire service deals with the fire and makes sure the estate is safe. You lose two days’ business and have to cover the costs of cancelling and re-booking models, stylists and prop hire for a photo shoot you had booked in for those days.

Not to be confused with

Buildings and contents cover

Buildings and contents insurance covers the cost of repairing damage to a building or replacing damaged or stolen property – it doesn’t cover the loss of business income and other expenses you’ll face while sorting out the problem.

Find out more about buildings and contents cover

Important - calculating income and exceptions

In our policies, business interruption cover is calculated from gross income for office, surgery and tradesman policies and gross profit for retail, hotel, pub and restaurant, manufacturing and wholesale policies. For homeworker policies, how cover is calculated will depend on your trade.

The loss of income or profit is only covered by our policies if it is a result of an insured property loss, for example a fire burning insured stock.

Book debts cover excludes failure to collect debts which have been traced.

Business interruption cover does not operate if the business is wound up.

Important note

The information on these websites pages is for your general information only. Always check the wording in your insurance documents carefully to find out exactly what cover your policy provides, what the limits of the cover are and whether there are any exclusions or conditions.