The going may be good for your business, and thriving too. But things can go haywire abruptly, from a disastrous fire or any natural calamities, bringing despair and losses, making it impossible to continue trading.
Not necessarily, if you have Business Interruption Insurance which covers the loss of gross profits (GP) that a business suffers after a disaster like fire or other catastrophes. The GP loss covered may be due to disaster-related dip in business turnover.
Most standard property insurance policies taken by businesses cover only loss or damage to tangible items such as equipment and inventory, warehouses, office or store. Business Interruption Insurance differs from property insurance and the additional coverage allotted by the Business Interruption Policy covers the gross profits that would have been earned.
This means it is designed to put a business in the same financial position it would have been in, if the accident had not occurred. This product is not generally sold as a stand-alone policy and piggy backs the property insurance policy. The business interruption policy pays out if the cause of the loss is covered by the underlying property policy.
Businesses may want to consider interruption insurance as an essential part of their insurance program to ensure business continuity.