Insured trigger
Cover commonly depends on insured property damage or another trigger expressly agreed in the policy.
Downtime can be expensive
Business interruption: lost earnings can continue long after the property damage.
After insured property damage, revenue may fall while wages, rent, finance and other fixed costs continue. Business interruption insurance is designed for this financial consequence.
Continuing costs
Wages, rent, leasing and other fixed expenses may continue during shutdown.
Lost insured profit
Lost insured operating profit may form part of the indemnity calculation.
Indemnity period
The indemnity period should reflect realistic repair, replacement and restart times.
Dependencies
Suppliers, customers, utilities and key machinery can create dependency losses.
Extra expense
Additional costs used to reduce the interruption or maintain operations may be covered depending on the wording.
Look beyond the property value
A relatively small physical loss can cause a long production or sales interruption. The economic consequence should be assessed separately.
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