How business interruption insurance coverage protects your business will vary greatly depending on your situation, type of business, your specific policy, and the specifics of the claim made. In some situations, business interruption coverage will cover the operating expenses from a temporary location while your current one is repaired or rebuilt. In others, it will ensure that you make the same level of profit that you were expected to make had your operations not been interrupted by covering loss of income and preventing lost income. If you have questions about determining what your policy could cover or which options are available, it is recommended that you speak with your Morison Insurance broker, who will be happy to assist you.   

Any business owner could use the coverage provided by business interruption insurance. Even a small, independent business run out of a single-desk office by a solo entrepreneur could easily be unable to operate normally due to damage to the business premises.   

It's possible that a fire that started on a neighbour's property outside of work hours could spread to the business location, rendering it temporarily unusable. Although the business owner is not at fault, this would be a significant inconvenience, and they would be required to cover many of the costs associated with their business being closed. This can help prevent financial losses if something happens.   

If you require assistance with your business interruption insurance policy or would like a business interruption insurance quote, please speak with your Morison Insurance broker.  

Like most types of commercial insurance, business interruption insurance is not legally mandatory. It is also not a stand-alone product, as it remains an optional part of a business insurance policy. However, it is a highly recommended coverage for any business owner. This is because needing to close your doors while continuing to pay ongoing business expenses at any time can be devastating for any company, especially a small business that has fewer financial resources. Remember that many businesses can never recover and reopen following a major business interruption because they simply don't have the funds to keep paying expenses such as commercial rent and employee wages when there's no way to bring in income. Business interruption insurance can help significantly soften this blow, as it can provide financial compensation if the unthinkable were to happen.   

The amount of business interruption insurance coverage that any company needs will depend on several factors related to the business operations. These factors include the following:   

• The size of the company   
• Ongoing costs the company pays, such as rent, maintenance, energy, security and so forth   
• The number of staff and their salaries   
• Profit the company is expected to make   
• The location of the building and nearby risks   
• Any risks specific to the industry that may result in a shutdown   

Please note that these are not the only factors determining the level of business interruption insurance you may want to provide for your company. If you have any questions about which amount is right for you, your Morison Insurance broker will happily answer them.   

Business interruption insurance covers the costs of ongoing expenses and lost income if a business owner must close their doors due to physical harm to the business location, civil unrest, a natural catastrophe, or other insured reasons out of the control of anyone involved. The types of perils covered will vary based on your insurance provider and how your individual insurance policy is written. In the same sense, the types of expenses you can expect coverage for will also vary according to the terms of your specific policy.   

Depending on your business interruption insurance policy, this could include covering rental or lease costs of the building you operate out of, relocation costs, extra security measures, duplicate bills such as utilities, paying staff who are unable to work, and other ongoing costs that a business owner would likely need to pay regardless of the condition of the building after a claim. If you would like to know more details or would like a business interruption insurance quote, it is recommended that you speak with your Morison Insurance broker.   

Sadly, business interruption insurance doesn't cover everything. Firstly, if your property is damaged, it will not cover the cost of repairs or replacement of the property damage itself. Business interruption policies will only cover the expenses that relate to you not being able to run your business normally due to property damage. Coverage for the damaged property and the contents of the building, such as furniture and electronics, would fall under commercial property insurance as long as the damage was incurred due to an insured peril.   

It's also important to understand that business interruption insurance will not offer you any financial support to handle the cost of legal defence, litigation and settlements should you be subjected to a lawsuit for any reason, including because you're accused of causing third-party property damage. Liability claims and legal costs of covered lawsuits would be covered by commercial general liability insurance or errors and omissions insurance. In some cases, you may also need additional types of liability coverage, such as cyber liability insurance or product liability insurance, to receive insurance compensation for liability costs, depending on the reason why legal action is being brought against you.  

• Fire and Explosion: No matter how cautious you are, there's no way to completely avoid the risk of a devastating fire. From faulty electrical wiring to lightning strikes and beyond, they can occur at any time, even to the most well-prepared business owner. You could even be forced to shut down your business for a period of time if flames never actually touched your building, just due to the severe damage that smoke from a fire in a neighbouring business can cause. If a fire or explosion occurs, there's no doubt that your business will experience some downtime while fire mitigation is underway, and when that happens, you can file a business interruption claim.   

• Floods: Not every business interruption insurance policy covers perils such as flooding, so if your business is located in an area that is prone to overland flooding from a river or lake that has burst its banks or just from sudden bursts of extreme rainfall, it's important to speak with your experienced broker at Morison Insurance and ensure you have the right type of business interruption insurance to protect you against financial losses caused by having to shut down your business in the aftermath of a flood. You may also need an endorsement specifically for business interruptions that are due to floods caused by faulty plumbing, such as a burst pipe.  

• Natural Disasters: Much like a fire, there's no stopping a natural disaster, and it can have a massive impact on your ability to keep your business operations up and running. Your business insurance interruption policy may specify which natural disasters are covered, or it may exclude certain types of natural disasters and provide coverage for any that aren't specifically excluded.   

• Supply Chain Issues: Most modern businesses don't operate in an isolated bubble, meaning you may rely on third-party suppliers to keep your business model going. For example, you may manufacture products that require parts fabricated by another company, or you may produce food with ingredients that come from one or multiple third-party suppliers. So what happens if disaster strikes a business that precedes you in the supply chain and they're unable to provide you with the crucial items you need to fulfill your business obligations? Depending on the circumstances, you may be eligible to file a claim on your contingent business interruption insurance so you can pause production until your supply partner is back on their feet and able to resume their normal position in the supply chain.  

There are two possible ways in which this question can be answered. One way to look at this question is to ask how long business interruption insurance will reimburse an insured for when the insured is not currently working out of their primary business location. This is also usually one year, although once again, it changes based on the specific points within your policy.  

The other is to answer how long the contract is before you must renew. In this case, it will last as long as your business insurance policy that it is part of, which usually is one year, but it might change based on the details of your particular policy. When it is time for you to renew your business insurance, your business interruption insurance will be renewed alongside it.  

If you have questions as to how long your policy will cover you or if you would like to know more about the estimated time a policy could last, we recommend that you speak with your Morison Insurance broker.  

If you suffer a business interruption and need to file a claim, you'll need to calculate your losses to get the right amount of compensation from your insurer. There are two different methods of calculating business income losses: gross receipts and net income. For the gross receipts method, you subtract your actual sales from your projected sales to find the number of lost sales and then subtract your saved expenses from your lost sales to find the amount of your business income losses.  

With the net income method, you subtract your actual net income from your projected net income to find the amount of lost net income and then add your lost net income to the number of operating expenses you have incurred to find the amount of your business income losses. It's well worth noting that one of the big benefits of working with a qualified insurance broker is that they will support you in making these calculations to ensure you are able to access the compensation you're entitled to, so don't hesitate to contact your Morison Insurance broker with questions about calculating business interruption insurance claim amounts.  

Yes. There are plenty of ways you can reduce your business interruption insurance quote. Some of them are listed below:   

• Avoid making claims on small losses on your business insurance plan to keep a clean claims record.   
• Keep a good credit score.   
• Ensure that you are taking precautions so as not to get shut down. This includes following workplace safety guidelines.