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Does your business insurance cover being unable to operate?
August 9, 2021
Floods, fires and other such natural or manmade disasters could all damage or destroy your business premises. While you probably have insurance to cover damage to stock and the premises, chances are you will be unable to operate, at least for a while.
Every day you do not open, you lose another day’s earnings. What is more, being forced to shut down temporarily does not stop the bills from rolling in. You will still have staff to pay, loans payments to make and more. That is where
business interruption insurance
can save the day, but only if you took it out. Typically, it is an optional extra to business insurance policies.
Business interruption insurance is typically specific
As with any insurance, you need to check your policy to see what it covers. The ideal time to do this is when you purchase the policy, not when you need to use it. Business interruption insurance requires you to have suffered the
loss of physical property
, which forced you to close or stop trading for a time. It does not typically cover interruptions due to government orders.
Insurers promise the world when they try to get you to buy their policy, yet the truth can be very different when you need them to step up and pay up. They sometimes try to hide exclusions in the small print or use ambiguous language to allow them an escape route if you make a claim. If you can convince a court that the insurer purposely misled you or tried to confuse things, you may be able to hold them to account with a bad faith insurance claim.