One of the biggest risks to businesses is underinsurance and Business Interruption Insurance can help with that. People often underappreciate that the business recovery isn’t the size of the loss itself but what follows. When a serious issue hits, the longer it takes to get back to normal trading, the more costly it is and the harder it becomes to keep staff and customers. Many businesses underestimate how long it will take to bounce back from such difficult times. The reality is that nearly half of businesses will take between 12 to 24 months to recover and most businesses do not have cover that will last that long.
If cover runs out before a business has fully recovered then the impact can be significant. Research shows that companies would have to adapt operations just to remain open. Others would rely on loans, savings and cash reserves and for some it could mean closure completely.
Often small business owners think about recovery in physical terms such as replacing buildings or equipment. However it takes time to rehire staff, start up supply chains again and rebuild customer confidence.
Some insurance policies will include a two year BI indemnity period at no extra cost to clients. It usually is applied across Commercial Combined, Office and Surgery and Property Owners policies. This gives businesses the time and financial headroom to recover properly.
To help calculate realistic recovery costs you can use a business interruption calculator which will offer guidance on which figures to include and how to set accurate sums insured. This tool helps businesses better understand their exposure in such circumstances and how best to recognise the value of protection in these incidents.
For more information give us a call on 01256 463090.