It doesn’t take a lot to disrupt a business, especially an SME that isn’t running with huge cash reserves and manages cash flow on a month to month basis. That’s why it’s sensible to protect yourself, your organisation, and your employees with Business Interruption cover.
What is it?
Business Interruption Insurance provides financial support in the event of a natural disaster, both to repair the physical disruption, and to replace any financial losses, such as profits and staff salaries. Essentially it’s designed to put the business in the same financial position as it was prior to the disaster.
It’s come in very handy for plenty of businesses in the past too. From 2015 to 2016, storms Desmond, Eva and Frank battered the UK, causing devastating floods in certain areas. These floods resulted in 5,000 claims, and £15m of emergency payments being made to businesses.
Costs and consequences
Successful business is about negating risk and managing variables. And having the right cover can help you do it. Can you really afford not to? After all, 25% of business that suffer a disaster cease to trade in a year’s time.
Last year the overall losses from natural disasters totalled $175bn. That’s not a number that you want a piece of, and thinking it won’t happen to you, isn’t the answer. Just because your business isn’t in a flood risk area won’t make you safe. In fact, warehouse fires alone cost businesses £230m annually. And fires in general result in 1,000 job losses every year.
Preparing for the worst, not hoping for the best
When a business can’t trade for a period of time, many of the usual expenses still need to be paid, from wages, to rates and rent. Even the most successful organisations take a major hit. And what might be a dent in profits for a multi-national, could be fatal for an SME. Having business interruption insurance is a relatively inexpensive safety net that will help you when you need it most.
The simplest, most effective way to prepare is to have a business continuity plan, find out more in our infographic or visit www.jelfgroup.co.uk
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