Who needs a business interruption insurance?

Business owners often think about having their equipment, stock or tools ensured, so as to have these items replaced as soon as possible and at little cost. They think about floods, fires, explosions, any kind of conceivable accident. But have they thought about the consequences of these items being destroyed or damaged by this flood, fire or explosion? Have they thought about the cost of closing down the business for as long as it will take to start operations again?

Business interruption insurance, or “consequential loss insurance” as this kind of business insurance policies is sometimes known as, covers the financial consequences of an event which has caused business operations to be brought to a halt. Whole or part of the revenue which would have been generated by the business if the event had not materialised, and if the production had not been disrupted by the consequences of this event, will be paid off by the insurance provider.

A business interruption insurance policy is usually linked to a property insurance policy or a package policy, so may businesses will not even have to wonder whether they should take one if they are only interested in other products tied with this one.

However, businesses owners who would really and directly want a business interruption insurance may include business owners of companies dealing with heavy, hardly replaceable machine tools which take weeks to ship, or businesses which have to operate on a full-time basis, with factories opened day and night, or businesses usually keeping very little stock either because it’s a business strategy, or because goods simply cannot be stored for too long.