Batten down the hatches for tales of the unexpected

As winter takes hold ENDSLEIGH, sponsors of new business of the year at the Gloucestershire Business Awards, explain the need for interruption insurance

AN increase in seasonal weather extremes can have a direct impact on the profitability of your business.

And with extreme weather becoming a more regular occurrence, more businesses are suffering from the adverse impact it can have upon trade.

According to research by the Met Office in 2015, 47 per cent of retail industry executives surveyed ranked weather as the third most important external factor which drives consumer demand.

As well as affecting consumer demand, snow, ice, heavy rain and gales can play havoc with premises.

How would you keep your business running if your premises were flooded or a large proportion of stock was destroyed due to storm damage?

Other external factors such as a gas explosion, fire or roadworks outside your front door can bring business operations to a grinding halt, potentially putting a dent in your income and resulting in both financial and reputational damage.

It’s surprising, therefore, that business interruption insurance is often overlooked.

It has been estimated to have been omitted from the insurance policies of around 40 per cent of UK SMES.

This could be due to a lack of understanding around what it covers or because it’s believed to be an unnecessary expense.

Business interruption cover, also known as consequential loss or loss of income insurance, covers the financial hit following physical damage to your property from incidents such as fire, theft or flood.

Most policies cover any additional costs but is usually limited to an indemnity period of 12 to 36 months. depending on the type of business.

Here are three examples of circumstances under which you might make a claim on your business interruption insurance:

Natural disasters

Extreme weather conditions can cause damage to property and ultimately lead to halted production lines and loss of income.

Loss of water or electricity

Employees won’t be too happy to work in an office with no running water or electricity – especially as it’s actually a legal requirement.

So a sudden power outage or plumbing problem can cause a bigger hassle than having to call out a plumber.

Supply chain disruptions

Snowfall and ice can prevent or delay the delivery of products, while adverse sea weather can add 5-6 days to a shipment, leaving you with nothing to do but sit and wait for distribution to start up again – losing income as you do so.

When taking out business interruption cover, it is important to provide your insurer or broker with the right information.

A business interruption claim is usually going to be a large loss which means you do not want to be underinsured when the time comes to make a claim.

Your business interruption policy should mirror the financial path of your company and take into consideration your future trading for the indemnity period of your policy.

With more than 25 years’ experience in the commercial sector, Endsleigh provide tailored business insurance for various trades and industries across the UK.

Endsleigh’s team of account managers will take the time to understand the complex needs of your organisation and build an insurance solution to ensure your financial interests are protected.

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» Contact the Endseigh commercial team on 0333 234 0021 or visit endsleigh. co.uk/ business

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