The economy can be quite unpredictable, but even more erratic are the unfortunate catastrophes that can beset any business. Whether it is a fire accident, a freak storm, or even a devastating earthquake, such things are beyond the power of businesses that are at the mercy of such disasters. Fortunately, financial hedges such as business interruption insurance products can help businesses offset the losses they suffer from an unforeseen accident.
An event like the recent hailstorm that hit the Brisbane area, resulting in costly damages to both residential and commercial properties, put to light just how expensive it can be to recover from a very physical interruption in business operations. As reported on the Courier Mail in November 28, 2014, the hail was so strong that it managed to smash the city’s various windows and tip over exposed planes on airfields. Not only did affected businesses lose actual revenue, they also lost potential profit from transactions that could have been had it not been for the storm.
While companies would do well to secure insurance for their physical equipment, as in the scenario above, they also need to consider insurance to cover whatever they lose should a business turnover process be suddenly and violently interrupted. Failure to have a financial hedge for the turnover could leave a company vulnerable to any fixed costs it might still incur despite its loss, such as rent, utilities, and so on. Without a backup, a company would simply close up shop. Those companies looking for reliable business continuity insurance in Sunshine Coast should approach business insurance providers such as Insuring theProduct to safeguard themselves from potential fiscal risks.
Business interruption insurance covers a lot of things, not just the potential lost revenue from a failed turnover. It can also be structured to cover for fixed costs incurred by the business, which could reduce the turnover for an exposed business (as discussed earlier). The insurance additionally covers for expenses for moving the business should it need to transfer to a more conducive location, and other expenses necessary to ensure the continuity of operations (Bonds, in-business marketing etc).
While many companies remember to secure insurance for their equipment and even personnel, business interruption insurance can sometimes be neglected. For the sake of the business’ survival, all companies should consider having a continuity plan and business interruption insurance in place.
(Source: Hail first big event of summer, but Deutsche Bank analysts reckon only moderate risk to earnings for likes of Suncorp and IAG, couriermail.com.au, Nov. 28,. 2014)