Avoiding underinsurance in business interruption policies

Inadequate business interruption insurance cover can seriously impact the ability of a business to recover following a loss.

However, business interruption is a notoriously difficult area to understand and The Insurance Institute of London estimate that around 40% of policies that are taken out to provide protection prove to be underinsured.

The problem arises due to misunderstandings of the term ‘gross profit’. The definition of ‘gross profit’ for insurance purposes differs significantly from an accountant’s understanding of the term. As a result, businesses frequently declare incorrect figures, resulting in underinsurance.

Committed to delivering best practice in all that we do, we aim to ensure such a scenario never arises. Drawing on our industry knowledge and utilising the latest software, including business interruption calculators, we take a methodical approach to gross profit calculation, enabling us to help you accurately assess the level of business interruption cover you need to have in place.

We will work closely with you to look at all eventualities, ensuring your indemnity periods are set accordingly.

Throughout the process, we will clearly explain key terms, ensuring you understand exactly the information required and whether there are any other factors you need to consider. In this way, we are able to arrange the optimum solution for your needs, ensuring your business and interests are adequately protected, whatever happens.

If you want to be sure your company is adequately insured please get in touch.