Why Your Business Requires Business Interruption Policy

23 Jun 2017
Larry Ficks
688

Running your own business and being your own boss is the dream of many, especially young people who aren’t afraid of setting high aspirations. As a survey of the National Australia Bank (NAB) showed, we Aussies sure are on the path of being a startup nation.

It doesn’t take long to see why many are having these life goals. From managing your own income, to paving out the desired future for yourself, it’s comforting to know you take financial matters into your own hands. Of course, the process of running a business isn’t exactly piece of cake, there are so many decisions to make, be they related to productivity, costs or investments.

And yet, even if you do take care of these aspects properly, you still have to know there are certain risks your business is exposed to which leads us to another important decision you have to make: that of acquiring a business interruption policy. Why does one need business interruption insurance you ask? Well, say a natural disaster occurs, and it seriously affects your business premises. This means all of the money you invested in special equipment, stock, and all of the building contents are exposed to risk.

How would you expect to carry on with your work without having an incident such as that affect your business? Unless you have the means to cover up all the damage, and get relocated finding another premise immediately, you might as well consider your business finished, as harsh as it sounds, not being in function for months to come.

Now imagine if something like this happens, then you’re left wondering how to pay out personal expenses, rent, wages, and worse if you have to pay creditors and loan repayments. The business losses after such an unfortunate event are great because owners haven’t taken them it account, and haven’t taken the proper measures, like the coverage of business interruption policy.

Getting this insurance means you can get back on your feet, faster, and have your business running again. It’s needless to say it would cover up loses, reduced profits, income, salaries, and rent costs, as well as those of relocation. Sure, it all depends on every business individually, and the potential damages, which is where a professional insurance broker comes in handy, to help you calculate the correct sum insured and tailor the policy for your needs.

A broker does so by taking everything into consideration that’s related to your business, both the type of business you run and the location, then how long it would take for your business to be shut down in case of a catastrophe or natural disaster, and the revenue you’d be bound to lose. Your business is your valuable asset, and as such deserves to get the proper protection.