Business Interruption Insurance - Helping you recover after a loss

Unexpected losses, accidents and natural disasters can make it difficult to keep your business running. That’s why it’s vital to have appropriate insurance cover, including business interruption, to mitigate risks to help ensure business survival and success.

If an insurable event, such as a fire, flood, or burglary, brings your business operation to a standstill, business interruption insurance can help you recover and keep your doors open by covering*:

• Loss of insurable gross profit
• Staff wages
• Financial obligations such as loan payments
• Additional expenses, such as leasing a temporary premises or sourcing products to continue operations
• Professional assistance to quantify your loss

The Insurance Council of New Zealand reported that over $420 million in Commercial Material Damage and Business Interruption insurance claims were paid out in 2021 alone (17% increase from 2020). **

This insurance cover means your business can continue to meet its financial obligations to staff and shareholders. It provides critical business continuity cover for businesses that operate from their own premises or rent their premises to tenants.

Choosing the right Indemnity Period

A Business Interruption policy is unique in that you select both the sum insured and indemnity period. Following an insurable event, the indemnity period is the maximum length of time (generally 12 to 36 months) cover is provided by the insurer.

As we continue to see the insurance industry impacted by extreme weather events, supply chain issues, and construction material shortages, an inadequate indemnity period is emerging as a common cause for underinsurance.

It’s vital to set an appropriate indemnity period to meet your business needs. The last thing you want to hear at claims time is that your indemnity period had expired yet your business needs additional time to make property repairs to return to pre-loss trading levels.

Talk to your broker to ensure you have the right insurance cover for your business.

*A separate Business Assets or Material Damage policy is required to cover your business assets and must be triggered first to initiate a Business Interruption claim.

**Market data, Insurance Council of New Zealand, Commercial Material Damage and Business Interruption 12 months to September: https://www.icnz.org.nz/media-resources/market-data