Any business undertaking is set up to trade at a profit and to provide a return on the capital, which has been invested in it.
The physical loss or damage to such business caused by fire (or other insured peril) can be compensated for by a FIRE POLICY.
However, in addition to this material damage, there are other losses to the business resulting from disruption of business activities and loss of profits/or trade.You can also enter into Long Term Agreement (LTA) with insurers as a means of obtaining 10% Discount off your premium. Under the LTA, you will have to offer to renew the policy with the same insurer for a period of at least three (3) years.
This loss of trade is not compensated under the ordinary FIRE POLICY but under a BUSINESS INTERRUPTION INSURANCE POLICY.
The Business Interruption Policy pays for:
- Net Profit Loss in consequence of the interruption of the business.
- Standing charges which continue to be payable by your business to the extent they are no longer earned by residual trading.
- Wages of employees that need to be retained during the interruption period.
Thus, Business Interruption Insurance is essential if the company is to continue in business after a fire loss, pay its outgoings and ensure that following such a loss of earnings, it does not become insolvent or go out of business. |
