Business Interruption Sum Insured Review
There is much more to protecting your business than simply insuring its physical assets. As an owner, shareholder and/or someone that might have provided investment finance, you expect an income stream that will continue to cover the taxable profit, as well as the ongoing operating costs of your business.
The net profit and ongoing expenses, including payroll, management/staff bonuses and financing costs, are all regarded as insurable Gross Profit, which can and should be protected – this is the purpose of Business Interruption insurance.
There are two possible causes of a reduction in insurable Gross Profit following damage due to an insured peril. The first is a reduction in turnover. In other words, a drop in sales will naturally lead to a loss of insurable Gross Profit. The second cause of a loss of insurable Gross Profit can be from an increase in cost of working to maintain normal sales and/or production.
Disruption to your organisation can also result from damage that occurs away from your premises. An explosion at a public utility, a fire at a supplier’s factory, or storm damage at a customer’s premises can all lead to disruption for your organisation.
While full Business Interruption insurance covers both forms of loss of insurable Gross Profit at and away from your business premises, and can literally save your organisation from business failure, it is a little appreciated product that is often not taken out or is not set up correctly.
International Institute of Claims Preparers believe that this is a vital insurance cover that every business needs in some form to protect against, not only potential loss of cash flow, but the very survival of their business in the event of an insured peril.
Our Institute members do not sell insurance. Rather, using their vast experience in handling claims for literally thousands of businesses in most industries, they are able to review service to determine the level of cover that is required to protect the organisation in the event of a loss. This means determining which alternative method of insurance is appropriate and the correct Indemnity Period, as well as reviewing Additional Increase in Cost of Working, Claims Preparation fees and the other extensions of cover that are needed to fully protect the organisation.
Other services offered or arranged by IICP recognized Claims Preparers include:
To contact your nearest IICP recognized Claims Preparer please use our Locate a Member or Contact pages.