What is Business Interruption Insurance? 

For business owners, one of the greatest risks is when business operations are affected by loss, damage or a disaster. A temporary cessation of business trading can affect you financially. If the business interruption is caused by insured events, which lead to loss, damage or destruction of property, you will be unable to trade and earn an income.  Business Interruption insurance is designed to protect you from financial loss caused by an insured event or incident that halts the business operations. Business interruption insurance helps return your business to the same financial position it was in prior to the event or incident. 

Why is Business Interruption Insurance Important?

Owning a business is a risky undertaking. Purchasing business interruption insurance can save you from the debilitating costs of recurring payables if your business has to temporarily stop producing goods or is unable to trade. It ensures that your business has a reliable financial stream of income when you have to pay expenses like rent, payroll, overhead costs, and contractual obligations with suppliers and vendors. Business interruption assists to place you back in the same position you were in prior to the event or incident. 

What does Business Interruption Insurance Cover?  

An interruption to your business can be caused by a number of insured risks or perils. Examples of this are when your business is affected by the devastating effects of flooding, earthquake, fire, burglary or theft and weather-related losses. 

Interruption to your business operations leads to lost income and profits. Business Interruption Insurance covers you for loss of profits or loss of rental income if you own a commercial building. It covers additional increased operating expenses that are incurred during a period of disruption, such as moving to new premises to continue trading. It also provides cover for professional expenses incurred, such as an accountant fee to prepare and present a claim evidencing loss of income to your insurance company. 

Make sure that you have a dependable insurance solutions provider that will help you in case of an unexpected business interruption. Schedule an appointment with us at Insurance Advisernet! 

Frequently Asked Questions 

What is included in business interruption insurance? 
Business interruption insurance can provide coverage against costs as a result of the disruption to business operations, like: 

• Loss of gross profit
• Loss or gross revenue  
• Loss of gross rental income 
• Wages / Payroll
• Additional increased costs incurred during a disruption
• Claims preparation costs 

Business Interruption policies can also extend to provide limited cover for other events, such as interruption or interference to the business resulting from the closure of transport routes or closure by an authorised body, preventing access to the premises. Or where your key supplier or customer suffers interruption or interference. 

What are the benefits of business interruption insurance? 
The primary benefit of business interruption insurance is to protect the business from financial loss caused by an insured event or incident that halts the business operation. Business interruption insurance helps return your business to the same financial position it was in prior to the event or incident. A business interruption policy provides temporary financial relief while the business is rehabilitating itself. 

What are the most common causes of business interruption? 
A business interruption claim can be triggered by a number of insured perils that cause disruption to business operations, including, but not limited to: 

• Natural disasters / Acts of God 
• Damage to property (e.g., fire or explosion)
• Burglary and vandalism
• Flood 
• and other weather-related losses

How is business interruption calculated?
A business interruption loss calculation is a formula based and best actioned by an accountant to establish the financial loss from a claimable event. It considers the financial impact and loss of revenue that would have been earned but for the loss occurring. This is determined from the financial records and previous trends of the business. 

What is SME Business Insurance? 

Having adequate business insurance cover is one of the most important considerations when in business to ensure protection should loss or damage occur. Business insurance policies allow you to select relevant sections of cover based on your individual needs and group them together as a package.  

Businesses in New Zealand, particularly SMEs, can benefit from business insurance solutions that will cushion them from financially disastrous events which cause damage to property, loss of profits and third-party liabilities. 

Every SME needs business insurance that considers their overall risk profile and addresses their needs. Depending on the business, industry, and the inherent risks associated with operating within that industry, an organisation can obtain an SME business insurance package that is tailored to meet their individual insurance needs.  

Business insurance can include but is not limited to: 

• Material Damage - provides protection against property damage to physical assets owned by the business, such as buildings, contents, stock and customers goods, in the event of an insured incident.  
• Business Interruption - protects you from financial loss caused by an insured event or incident that halts business operations. Business interruption insurance helps return your business to the same financial position it was in prior to the event or incident. 
• Burglary/Theft - covers theft of goods and property within the business 
• Plant & Equipment - insures tools, equipment, and machinery that are critical to business operation. 
• Motor – provides cover for physical loss, damage or theft of vehicles used for business.
• Liability – provides protection against legal liability for property damage and personal injury to a third party. 
• Property anywhere in New Zealand – covers portable assets and property that you take away from your premises

At Insurance Advisernet, we offer a broad range of insurance solutions at a price you can afford. Our authorised insurance representatives will work with you to understand your business and your specific insurance needs. We can provide you with a recommendation based on a thorough analysis of your business risks and liability exposures. 

For more than 15 years, Insurance Advisernet has been at the helm of the insurance brokerage industry in New Zealand, providing coverage to business customers.  

Protect your business today! Schedule an appointment with our expert brokers, and we’ll be happy to customise an SME business insurance policy that’s right for you and your business.

Frequently Asked Questions

What is SME Insurance? 

Business Insurance protects small to medium-sized enterprises from major financial losses as a result of property damage, loss of profits and third-party liability claims. Business insurance can be packaged to include a range of policies like motor, property, plant & equipment, cybersecurity, business interruption, and professional indemnity, among many others. 

How can insurance help small businesses in New Zealand? 

Having adequate business insurance is one of the most important considerations when in business to ensure protection should loss or damage occur. Business insurance policies allow you to select relevant sections of cover based on individual business needs and group them together as a package tailored to meet the requirements of the business.  

What does SME stand for? 

Small and medium-sized enterprises (SMEs) are independent businesses that maintain revenue and business assets and employ a certain number of employees below a threshold. The threshold for designating an SME differs across countries and industries. 

How can insurance help small entrepreneurs or SMEs, or how it relates to risk management? 

Buying insurance is a wise risk control strategy for SMEs. Having adequate business insurance is one of the most important considerations when in business to ensure protection should loss or damage occur.  Insurance provides cover for business assets, profits and liabilities, reducing financial uncertainty should the business suffer loss or damage. 

Why is insurance important for business owners? 

Having adequate business insurance cover is one of the most important considerations when in business to ensure protection should loss or damage occur. Insurance provides cover for business assets, profits and liabilities, reducing financial uncertainty should the business suffer loss or damage. 
Insurance that provides appropriate cover for your business needs is a critical component of business risk management strategy. Unforeseen events and accidents happen, that’s why having appropriate insurance cover in place can help business owners deal with and minimise the financial impact of such events.