Business interruption for charities
Have you considered the potential impact to your charity should disaster strike?
Have you considered a fire, flood, or an opportunistic hacker? If not, it might be time you did!
Let us take a look at what’s covered under business interruption.
What is business interruption insurance?
Business interruption insurance provides cover for losses following an incident that interrupts or interferes with your normal business activities. Most standard charity insurance policies should include business interruption as part of the package.
Business interruption insurance will only protect against the risks specified on the policy.
For example, communicable diseases (i.e. pandemics) are a common exclusion of business continuity insurance policies. Some business interruption policies include cover for specified diseases but, on the whole, Covid-19 was not covered by many policies due to the specified diseases extension.
What does business interruption insurance cover?
Business interruption insurance will usually provide cover against losses following (and in consequence of) material damage to your property at an insured location, although this cover will vary policy to policy. This cover will be in the form of gross profit, gross revenue, rent receivable or increase in cost of working with an indemnity period of normally 12, 18, 24 or 36 months.
Business interruption insurance could cover the following risks:
Extreme weather events, such as flooding
Electrical failure or equipment breakdown
Denial of access – for example, unexpected roadworks preventing customers or clients entering your premises
Loss of customer attraction caused by events such as a bomb threats or physical damage in the near vicinity (usually within a specified distance)
Utility failure – such as gas, electricity or water supplies
Failure of telecommunications and internet service providers
Death or criminal investigation of a trustee
What is commonly not covered with business interruption insurance?
Communicable diseases (illnesses caused by viruses or bacteria spread through contact with contaminated surfaces, bodily fluids, blood products, insect bites, or air transmission) – i.e. pandemics
Acts of terrorism (usually not including bomb threats)
Cover is also usually not provided if your organisation’s activities have discontinued permanently or a liquidator is appointed.