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Australia may be the lucky country, but sometimes your business just runs out of luck!
Exposure to extreme weather, natural disasters and criminal tampering are things that all businesses have in common. Stuff just happens. Calamities and misfortune, both natural and man-made, strike everyday businesses both small and large, and can wreak havoc on everyone from sole traders working out of their garage to behemoth corporations with premises the size of small cities.
When a catastrophe does occur it is often the interference to trading capabilities, and not the event itself, that has the real potential to bring a business to its knees. Business interruption insurance is designed to provide compensation for the financial impact of these events, and place your business in the same financial position it was before the chaos.
So what exactly does it cover you for? This will vary on your policy and its inclusions, some of which are optional. If your business was forced to temporarily close down, however, a typical business interruption policy might cover below:
Business interruption insurance policies are specific, however, and don’t cover every expense you’ll incur during the recovery period. Some of the important things that usually aren’t covered are:
The inclusions and exclusions above are typical, but not definite, and the onus really is on the insured party to know what their policy covers. Reading the fine print in your policy is ‘best practice’ management, and a big part of being a responsible business owner.
Whilst a good Business Interruption policy can help your business to get back on its feet, it won’t cover every possible event, nor will it pay every possible expense. But it should be a vital element in your wider disaster recovery plan – a plan that should include both a broader insurance package and (crucially!) a clear guideline for how your business would react and recover after a disaster event.
If something does happen and your place of business is affected, you’ll need to ask yourself two very important questions. Do I have Business Interruption insurance? And, are both the property and the cause of the event included in the coverage?
If the answer to both is ‘yes’, your business is already on its way to recovery. Just contact your provider, and let your ‘Get Out Of Jail Free’ card do its job.