CGU’s recent survey of nearly 500 small businesses found that one in four would not survive if they had to close their doors for three months. The survey found that a quarter of small businesses would have to shut down if they experienced a business disruption such as a major fire or storm and this figure jumped to 38 per cent if the shutdown happened during a busy period in the year for that business.
Perhaps the most striking finding was that 1 in 7 businesses experienced a shortfall in income because of a business interruption in the past 12 months.
Despite the findings, less than a quarter of business owners surveyed actually had business interruption insurance.
In the highly competitive world of small business, the slightest little hitch can send a business into a tailspin. Most small business owners would like to think they are prepared for life’s hurdles by insuring their premises, their employees and their equipment, but are missing a key element of insurance for business survival.
Business interruption insurance covers the shortfall in gross profits caused by the interruption to a business from fire, storm, accidental damage, or any other listed event on your policy. It helps pay ongoing costs and protects profit margins until the business is back on its feet and back at its profit level before the interruption. Business interruption may also extend to include optional extras such as Increased Cost of Working which will look after the rent at another premises, additional advertising for the new premises and much more.
Make sure this is on the agenda when you next review your insurance requirements. Take a look at the attached NIBA TV video and if you would like more information please do not hesitate to contact one of our qualified and experienced professionals here at NQIB.