If the worst should happen to your business, are you prepared? Insurance policies are designed to protect your business from disaster.
Many companies choose to put in place a business interruption (BI) policy, this gives them peace of mind and protects against the unexpected. Even if your future as a business looks bright, incidents can happen.
Be fully protected
Unfortunately, many BI policies fail to cover certain aspects of loss. The Chartered Institute of Loss Adjusters (CILA) found that 43 per cent of BI policies are underinsured by an average of 53 per cent.
Underinsurance can cause a serious financial crisis, depending on the asset that is insured and the extent of the shortfall in insurance. For example, a property is insured for £250,000, with an excess of £500. The property is subsequently destroyed in a fire, but the cost to rebuild amounts to £350,000. The property owner will have to make up the difference of £100,000 plus the £500 excess personally.
Prevent underinsurance – look out for these common problems:
- Insufficient indemnity periods – A large majority of BI policies have indemnity periods of 12 months, but it is unrealistic to expect a business to fully recover in that time. We recommend calculating a realistic indemnity period that will give your company sufficient time to become financially stable. We recommend a minimum of 24 months.
- Leaving wages out of the profit calculation – According to the CILA survey, as many as 2 out of 5 companies failed to include staff and utility costs as part of their BI insurance. These aspects are crucial to calculating appropriate gross profit.
Would your business benefit from a complimentary insurance review?
Peace of mind comes from having the best cover possible for your business and at The Trust Insurance Group, we pride ourselves on understanding our clients and their business risks to ensure that the correct levels of insurance cover are in place.
We offer a complimentary risk review to ensure that your business has the most adequate cover in place. To take advantage of your complimentary risk review, please contact us on 01476 434050 or email firstname.lastname@example.org.