Disasters don’t announce themselves — they arrive fast, disrupt operations, and leave a financial mess behind. While you might already have insurance for your premises or equipment, Business Interruption Insurance (BI) is what helps keep your business alive when income stops, but expenses don’t.
From fires and floods to supplier failures and forced shutdowns, BI cover is designed to replace lost revenue and cover critical costs so your business can survive, recover, and rebuild — instead of going under.
What Is Business Interruption Insurance?
Business Interruption Insurance helps cover loss of income and extra operating costs if your business is unable to trade due to a covered event such as:
- Fire or storm damage
- Theft or vandalism
- Equipment failure
- Government-ordered closures
Typical policy inclusions are:
- Replacement of lost income
- Coverage for ongoing expenses (e.g. wages, rent, utilities)
- Relocation or temporary premises costs
- Training for new systems or equipment
Who Should Consider It?
If your business can’t operate without a physical location, equipment, or a steady stream of customers — BI insurance isn’t just useful, it’s vital.
Industries at high risk include:
- Hospitality: Cafés, restaurants, pubs, catering
- Retail: Supermarkets, boutiques, florists
- Trades & Manufacturing: Workshops, factories, warehousing
- Health & Wellness: GPs, physios, dentists, vets, salons
- Professional Services: Accountants, designers, law firms
These businesses tend to have fixed overheads that keep ticking even when cash flow stops. Without BI cover, a single disruption could put you out of business.
Reality check:
- 40% of small businesses never reopen after a major disaster
- If you can’t reopen within 5 days, there’s a 90% chance your business won’t survive two years
What’s Typically Covered?
- Lost turnover due to a covered event
- Ongoing expenses (e.g. rent, wages, electricity)
- Temporary relocation costs
- Outsourced labour or training expenses
- Flow-on impacts from supplier shutdowns
What’s Not Covered?
It’s important to understand policy limitations. Common exclusions include:
- Undocumented cash income
- Pandemics (unless explicitly stated)
- Damage to property (covered under property insurance)
- Utility bills when operations have ceased
- Industrial actions or changes in legislation
Always read the Product Disclosure Statement (PDS) or consult a broker to confirm what’s in — and what’s out.
How to Prepare for a BI Claim
Having the right documents ready will make the process smoother. Be prepared to provide:
- Profit and loss statements
- BAS lodgements
- Payroll and lease records
- Event evidence (photos, government orders)
- Any disaster support grants received
Why Business Resilience Is Bigger Than You
Your business doesn’t operate in a vacuum. When small businesses survive disruptions, they help stabilise communities by:
- Keeping people employed
- Providing goods and services
- Supporting local charities and causes
- Volunteering and emergency response
The collapse of just one key business can send shockwaves through the local economy. Business Interruption Insurance isn’t just about your survival — it’s about protecting the heartbeat of your community.
Conclusion: Don’t Let One Disaster Become Your Last Day of Business
Most business owners protect their equipment, property, and stock — but forget to protect their income. That’s like insuring your car’s paint job and forgetting the engine.
Whether it’s a storm, fire, or supplier issue, Business Interruption Insurance is what helps you pay staff, keep up with rent, and cover your bills while you recover. It could be the most important policy you didn’t know you needed — until it’s too late.
FAQs
- Does Business Interruption Insurance cover COVID or future pandemics?
Usually not — unless the policy specifically includes coverage for communicable diseases. Always check the fine print. - Is BI cover expensive?
It depends on the size, revenue, and risk profile of your business. For many SMEs, it’s surprisingly affordable compared to the potential losses it covers. - Do home-based businesses need BI insurance?
If your business relies on consistent income and would suffer financially from a disruption (like fire or storm damage), yes — BI cover is still relevant. - Is BI cover included in general business insurance?
No. It’s usually an add-on or separate policy, so make sure it’s specifically listed in your coverage. - How long does Business Interruption Insurance pay out for?
Coverage typically lasts for a set indemnity period (e.g. 3, 6, or 12 months), depending on your policy.
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