Business Interruption

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What is Business Interruption Insurance?

Business interruption insurance (BI) is also known as time loss, consequential loss and loss of profits insurance. It provides cover for the financial losses due to an interruption to a business caused by material damage to property.

As a result of a property loss apart from physical damage, you may also suffer a loss of business income from which to pay the expenses of the business and make a profit. You might also incur extra costs, such as renting alternative premises, bank interests, employee’s salaries, rent, and electricity to maintain the turnover of the business. All these losses are covered by business interruption insurance due to loss of gross profits on account of reduction in turnover, in addition to increased cost of working during the interruption period.

The above expenses can be covered by a Business Interruption Insurance policy.

In order for a “Business Interruption cover” to operate, it is essential to have a Property All Risks or Fire Insurance Policy in tandem.

This cover takes into consideration the following aspects which should be addressed when opting for this cover:

1

GROSS PROFIT

The sum produced by adding standing charges to the net profit

2

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

3

STANDING CHARGES

Interest, Rent, Bank Charges, Insurance Premium, Advertising, Printing, Stationery, Electricity, Travelling Expenses, Maintenance of Plant and Machinery, Depreciation of Building, Plant and Motor Vehicles etc.

4

TURNOVER

The money paid or payable for goods sold and delivered, and for services rendered in the course of the business at the premises during a financial year

5

PERIOD OF INDEMNITY

Whilst the period of insurance is 12 months, the indemnity period differs. This would depend on the period the insured would need to prepare to come back to the position they were in before the loss in terms of both property and trading

Customarily, the periods would be anything between six to eighteen months

Period of Insurance

Whilst the period of insurance is 12 months, the indemnity period differs. Customarily, the periods would be anything between 6 – 24 months.

Deductible

The policy always has a time deductible applicable to each and every loss.

Premium rates are based on:

Limit of indemnity
Period of indemnity
Policy deductible
Type of occupancy
Physical features of the risk
Values at risk
Nature of risk
Location
Management and housekeeping
Loss record/ past claims if any

Important Information

Please note that for the easy understanding of the insurance policy, we have highlighted the important aspects. We will be glad to receive your queries and discuss the full set of policy terms, conditions and exclusions.

For more information, please contact ( Premier Insurance Broker ) at +971 2 658 8880.

Claim Settlement

The settlement would be based on the Indemnity amount payable by the insurers, which will take into account:

Reduction in Turnover
Increase in cost of working

You must alert us of any accident that may lead to a claim covered under the policy, and our team of experts will assist you in the quick settlement of the claim.

Call us as soon as possible, in case of an accident, and our team of experts will guide you through the claim process. For more information, please contact ( Premier Insurance Broker ) at +971 2 658 8880.

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