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Business Interruption Insurance


Business interruption insurance reimburses you for loss of profits. For claims to be valid they must follow an already made claim to Compendium for fire or other material damages (excluding theft or all risks).

Business interruption cover can be extended to include key suppliers and key customers. In the event of one of them suffering an insured peril, and consequently affecting your profitability, you will be able to
claim your loss.

Public utilities interruption cover is available for the interruption of public utilities such as telecommunications, electricity and water supply. Interruption as the result of breakdown must
exceed 24 hours.

Prevention of access cover is available should your premises become inaccessible to customers due to one of the insured perils (fire, flooding, etc.) and this results in a loss of revenue. This cover is normally subject to a 24-hour excess.

Please note:
The indemnity period selected must be sufficient to enable you to reinstate the damaged property and get back to full production and turnover. Bear in mind problems such as availability of production machinery, loss of market, etc.
When calculating loss of gross profit, remember to include all standing charges and net profit. Property owners should include loss of rent, and service organisations’ loss of revenue; the sum insured being the full annual revenue earned.
In the event of a loss, the claim is quantified by applying the rate of gross profit to the reduction in turnover as a result of the claim. The rate of gross profit is expressed as a percentage and is the proportion of gross profit to turnover. The rate of gross profit can be calculated by looking at past trading results in
your financial statements.
To reduce the sum insured under this section and save premium costs, you may wish to insure wages separately, with limited cover, excluding unskilled labour, for example. Increased cost of working to maintain turnover following damage is covered in your gross profit item. However, this is limited so you may wish to opt for further cover.

To speak to one of our brokers, contact us on 031 242 6800, or fill in the Request a Quote form.