WHY IS BUSINESS INTERRUPTION COVER SO IMPORTANT?

Imagine that you are binge watching the Game of Thrones final season and your power goes out at a crucial moment in the plot. Although not catastrophic, the interruption has thwarted your plans and ruined your evening.

When an Insured Event interrupts your business operations and you are no longer able to trade, the consequences could be far more serious. Zig Ziglar advised to expect the best and prepare for the worst, which we believe is wise advice indeed. It’s impossible to think of every potential scenario, which is why taking out insurance cover customised for your unique business situation should be top of your to-do list.

Business interruption insurance, also known as business income insurance, covers the loss of income that a business suffers due to an operational interruption after an Insured Event. 

Even if you are not operating there are certain costs like rent, electricity and water that must still be paid. It also means that you are not earning an income from your business until you can resume trading. The cover will take care of your fixed business expenses and ensure that you still have an income to look after yourself and your family.

An event may affect your business directly or indirectly. Problems with weather, natural disasters, public utilities or transport access could impact your business directly, or indirectly if the problem affects your customers or suppliers and they can no longer support or service your business. Depending on the scale and severity of a problem, restoration to business as usual may take some time. You need to ensure that you are covered until operations are restored to normality.

There are many claims that are weather or fire-related, and with the impact of climate change on the earth, this is likely to continue. According to an article on The Guardian website, Lesley Hughes, a professor of biology at Macquarie University, said that few parts of the Australian continent have not experienced an extreme weather event in recent months. In early 2019, the northern Queensland city of Townsville received 1.4 metres of rain in less than two weeks. It caused hundreds of millions of dollars’ damage to homes and businesses. Around the same time, Tasmania experienced dry lightning strikes which started fires that burned for weeks.

In an article on the 9News website, Sonia Marinelli writes that we are in a super drought. Australia’s temperatures are at a record high, increasing water evaporation, causing drier soil and thirstier livestock. The higher temperatures are increasing the drought threat and putting additional strain on water supply.

The impact of extreme weather conditions could affect food supply to your business, aside from damage to the premises itself.

Some examples of insured events include:

  1. Storm, rain, hail and wind damage;
  2. Fire damage;
  3. Lightning;
  4. Impact by vehicle;
  5. Prevention of access by regulatory authorities (customers and suppliers unable to reach you);
  6. Damage to utilities.

The art of running a restaurant involves many moving parts and one of the areas we can help with is ensuring that you have the specialised insurance cover you need. Ryno Insurance will ensure that you are appropriately covered for business interruption. You invest so much time, money and effort in your business and we want to make sure your restaurant is protected.


P: 1300 650 670
E: hello@rynoinsurance.com.au
W: www.rynoinsurance.com.au/hospitality

Important Note: All insurance policies have exclusions. Please refer to the Product Disclosure Statement or Policy Wording to decide whether an insurance policy meets your needs.

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Ryno Insurance is a specialist division of East West Insurance Brokers Pty Ltd ABN 83 010 630 092, 
Australian Financial Services Licence No. 230041. 

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