Business Insurance

They types of policies vary considerably from detailed Industrial All Risks policies for large businesses to smaller business packages for small businesses.  These policies will usually provide cover under the following categories:

• Material damage – buildings, fixtures and fittings, equipment, stock etc
   
• Loss of profits, sometimes called business interruption.  This covers certain financial losses as a result of insured damage to your material assets;
   
• Liability – a legal liability cover.

The extent of cover under your business insurance will be set out in the policy and the certificate of insurance.  The certificate is the document that shows what options and amounts you are insured for.

Your entitlement under loss of profits policies is usually calculated by specialist loss adjusters employed by their insurance company.  Some important things to remember are the following:

1. The insurance company is likely to limit your losses for those arising from the damage to your building rather than the event.  This is a very technical issue, and you should very carefully consider any attempts by an insurance company to do so before accepting a reduced or declined claim.  The question of what is connected to the actual damage to your building or assets rather than the event itself is not necessarily simple as insurance companies would tend to suggest.  For example, insurance policies sometimes cover losses arising from loss of utilities.  Clearly that is not damage to your building, and that will be covered, but you will be covered anyway. 
    
2. Many policies provide cover for loss of profits as a result of prevention of access.  So if access to your otherwise undamaged or only slightly damaged building is prevented by event such as a cordon or damage to other buildings or services, your loss of profits will still be covered.
    
3. Some policies cover loss of profits as a result of damage to public utilities.
    
4. Many policies provide payment for claim preparation costs.  If so, you are entitled to claim up to certain amounts for the costs of preparing your claim.  Don’t automatically use your normal accountant.  There are experts in business interruption claims who may be able to present a better case for you.  Because business interruption insurance is so complicated, it is often an area for strenuous negotiation and it is important that you are well represented before settling your claim.  Of course if the insurance company is going to meet those costs, there is no reason for not instructing your own expert.