5 Things you must consider when insuring your business against Loss of Profit
1. Who needs Loss of Profit Insurance?
To decide if your business needs Loss of Profit Insurance, consider the worst case scenario for your business. If the building you use for your business including all of your stock, computers & furniture was burnt to the ground, how quickly afterwards could you start making a profit again. If it is anything more than a few days, you need Loss of Profit Insurance.
2. Why should you take out Loss of Profit Insurance?
We live in a country rife with crime, changing weather conditions & less robust equipment. Whilst the costs of repairing or replacing assets after they have been damaged or stolen are already insured, it is often impossible for all items to be repaired immediately. There is a delay for a claim to be processed, plus then the delay for the actual repair to to be finalised (consider for example: a building, this could take well over a year to be rebuilt). Once all of your equipment is back up & running, there will still be another delay whilst stocks are replenished etc. This means that during all of these delays, you are not earning the profit you used to. Most businesses will be crippled by only a short period of no profits. Taking out Loss of Profit Insurance is a prudent way to ensure that your business will survive through all the trials & tribulations it will face.
3. How much does Loss of Profit Insurance cost?
We have a large book of clients with many different insurance companies, so we will be able to find the most beneficial policy with the cheapest premiums for your business.
4. Typical claims incurred on Loss of Profit Insurance policies
The most common claims on Loss of Profit Insurance policies involve slightly reduced profits because the business was not able to operate at normal levels after one piece of equipment was damaged or stolen. The most expensive claims tend to be caused by fires, trapped water, lightning damage, and violent storms. These can potentially flatten a business in an instant, with the most expensive element of these claims being the profit that is lost whilst the damage is being repaired.
5. What other insurance should be considered along with Loss of Profit Insurance?
You should definately take out cover against fire, other natural perils and theft. Make sure all of your computers, stock, machinery, buildings and furniture are all covered. See Fire Insurance, Theft Insurance, Office Contents Insurance, Business Interruption, Money Insurance and more.