As New Zealand businesses once again gets to grips with changing Covid-19 alert levels, it’s tempting – and understanding – to look for ways to cut costs.

Business interruption (BI) cover can seem like the obvious choice to get the chop, given that it typically doesn’t cover pandemics and its associated losses. 

But for the sake of a very small saving in premium, the reduction in cover could mean the difference between a going concern and doors closed for good should a natural disaster hit. 

BI insurance covers the shortfall in gross profit caused by an interruption to your business should a fire, natural disaster or another type of insured event force your doors to close, whether for a short or an extended period of time. 

Its aim is to return your business to the same financial position it was in before the event occurred, allowing the quickest possible resumption of normal business. BI cover is usually purchased alongside a material damage (MD) policy that insures the business' assets from physical loss or damage. 

Typically, BI cover would be triggered by an event under the MD policy - such as fire, flood or earthquake - that causes loss or damage to insured property that interferes with or precludes the normal operation of the business. 

Given those sorts of events happen with considerably more regularity than pandemics or their resurgence, it’s worth hanging on to. We know times are tough for many. For more information about your BI policy and how it can be made to work financially for you, talk to your broker. 

General Advice Warning

The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.