WHAT IS BUSINESS INTERRUPTION INSURANCE PROTECTING?
The mail man does not stop delivering bills when the fire brigade leaves after a fire is extinguished or after a storm subsides. How long can your business survive without revenue coming in to pay the ongoing expenses of rents, wages and salaries, utilities, leases and other financing costs?
If you have Business Interruption insurance, this risk and the associated stress is taken away from the business, its owners/shareholders, managers and employees.
What so many business owners do not appreciate until a loss occurs, by which time it is often too late, is just how much they have invested in their business. For most business owners, it is their:
- sole source of income – it can be more than one person and be for several family members;
- major financial investment – many forgo their current lifestyle building an asset for the future;
- mortgage over their home – often with a personal guarantee;
- superannuation or a major part of it; and
- the purpose for getting out of bed in the morning – their role in the community.
Far too many times you hear business owners say that if they suffered a major loss they would simply retire. What they find is that by the time they pay out their staff’s entitlements, the bank loans and overdraft, they have insufficient left to actually retire. Their life’s work has literally gone up in smoke and they have nothing to show for it.
When you consider all of this, Business Interruption insurance is one of the MOST important forms of insurance you can have.