Business Interruption Insurance
ABOUT THE PRODUCT
Natural disasters such as fire, flood, storm, or other events can cause extensive damage to a company's property. These damages often result in financial losses that may threaten the very existence of the company. That is why it is important to have business interruption insurance in place.
What does business interruption insurance cover?
This insurance applies in situations where there is a restriction or complete interruption of the insured operation due to damage to insured property. Your insurance will cover:
- Loss of gross profit from the sale of goods, own products, or services provided
- Increased operating costs that you reasonably incur to reduce the decline in turnover
- Fixed costs that must still be paid even during the interruption of operations, up until production is restored to its state before the insured property event or until the end of the warranty period
Fixed costs include, for example, employee salaries and wages, loan instalments and interest, insurance premiums, rental expenses, costs of maintaining patent rights, pre-arranged advertisements and advertising, utility bills, or maintenance costs for buildings and equipment.
Warranty period and deductible
The warranty period refers to the duration during which the insurance company covers any damage resulting from the interruption of your operations. It begins at the moment material damage occurs and ends when the impact of the business interruption no longer affects your operations. However, the warranty period cannot extend beyond the time specified in the insurance policy.
A deductible is always agreed upon for this type of insurance. It can be defined either by a specific number of days or as a combination of a percentage and a number of days.
THE IMPORTANCE OF THE INSURANCE
The business interruption insurance from PREMIUM Insurance Company is a supplementary coverage to property insurance and cannot be arranged separately. It is an exclusive addition to your company’s basic property insurance.
The primary purpose of this insurance is to protect your business from loss of profit and a weakened position in the competitive market during the period required to restore operations after a natural disaster has damaged or destroyed your production unit.
The goal of this insurance is straightforward: to compensate for lost profits and unavoidable costs, effectively making it as if the insured event never occurred. This allows you to navigate the critical recovery period without significant financial losses, helping you maintain your market position even during a temporary production or service outage.
The key advantage of this insurance is its ability to provide financial stability when you need it most – following significant damage that disrupts your business operations. With properly configured business interruption insurance, you can safeguard the long-term survival of your company.