Commercial Business Interruption insurance provides cover for financial losses incurred following damage due to an insured peril, which forces your business to cease trading for an extended period of time. Such instances can include flooding and fires.
This cover mitigates against the financial loss your business will face whilst it is unable to trade including loss of revenue, loss of gross profit, loss of rental income and additional expenditure to continue your operations such as additional costs for the hire of staff/alternative premises. This cover is restricted to the duration of the Indemnity period.
Cover can be extended, if requested, to include Business Interruption following:
- Damage at Suppliers & Customers premises – In the event that of one of your key suppliers or customers suffer a loss due to an insured peril, and consequently affecting your profitability, you will be able to claim your loss.
- Prevention of Access – 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.
- Public Utilities & Telecommunications – 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.
Definitions
- Indemnity period
The period beginning with the commencement of the Damage and ending not later than the number of months thereafter stated in the schedule during which the results of the business shall be affected in consequence of the Damage.
- Turnover
The money paid or payable to you for goods sold and delivered and for services rendered in the course of the business at the premises.
- Revenue
The money paid or payable to you for goods sold and for services rendered in the course of the business at the premises.
- Gross rentals
The money paid or payable to you by tenants in respect of rental of the premises and for services rendered.
- Gross profit (difference basis)
The amount by which:
The sum of the turnover and the amount of the closing stock shall exceed
The sum of the amount of the opening stock and the amount of the uninsured costs.
The amount of the opening and closing stocks shall be arrived at in accordance with the insured’s normal accountancy methods, due provision being made for depreciation.
- Uninsured costs
As specified in the schedule (the words and expressions used shall have the meaning usually attached to them in the books and accounts of the insured).
- Net profit
The net trading profit (exclusive of all capital receipts and accretions and all outlay properly chargeable to capital) resulting from the business of the insured at the premises after due provision has been made for all standing and other charges including depreciation, but before the deduction of any taxation chargeable account of on profits.
- Insured standing Charges
As specified in the schedule (the words and expressions used shall have the meaning usually given to them in the books of the insured).
- Standard turnover / Standard revenue / Standard gross rentals
The turnover (revenue) (gross rentals) during that period in the twelve months immediately before the date of the Damage which corresponds with the indemnity period.
