BUSINESS INTERRUPTION CAN HAPPEN AT ANY TIME – ARE YOU PREPARED?
Most of us take our workplaces for granted. We come and go, popping out for lunch or to a meeting, expecting that everything will be the same when we return. But what if something happened to disrupt this smooth flow?
As hundreds of workers found out in the City of London in July 2016, the work environment can become inaccessible in the blink of an eye. A gas leak around Blomfield Street led to the evacuation of many office buildings in the densely packed adjacent streets.
The gas leak took hours to put right. How much did that cost the surrounding businesses? All those missed deadlines, unwritten reports and lost opportunities; the wasted hours spent by some of the most highly paid people in the country.
Are you vulnerable to business interruption?
Business interruption can happen to any company. Adverse weather, civil unrest, fire, burglary, and vandalism: there is a huge range of events that could potentially stop your organisation from operating as normal. No company is totally immune.
While companies usually protect themselves with insurance to cover property, equipment and stock, it is less common to think about the loss of profit during business disruption. Yet in the event of business interruption, the usual costs such as salaries, rent and so on need to be paid, but no new income will be received.
Meanwhile, despite your best efforts, if your business is interrupted then relationships with customers are likely to suffer and they may look elsewhere. You may also miss out on new business opportunities that could have made up the gap.
How business interruption insurance helps
Business interruption insurance protects you when disaster strikes. This form of insurance provides compensation for loss of income as well as assistance with meeting the increased costs of working while the premises are restored, such as temporary offices, overtime, hired equipment or transport costs.
Insurance often also provides cover for marketing costs to tell your customers when you are back up to full speed. An advertising campaign is typically required to ensure this message reaches the right people.
How to manage a business interruption claim
There are some key steps you can take to ensure that if you need to claim on your business interruption insurance, the matter will progress smoothly. Firstly, before taking out insurance make sure that you read the policy carefully and understand exactly what is covered, what is excluded and what excesses are applicable. You should also be clear about time limits for submitting a claim.
When a business interruption event occurs, document the event and damage as far as you are able. This might include taking photographs, making notes, and keeping contact information of any emergency or remedial services you used. Be careful to keep receipts for payments in relation to the disruption.
The more information you can provide with a claim, the more likely it is to proceed quickly and successfully. Of course, ensuring you purchase insurance from a reputable and reliable provider is also essential.