Business Interruption Insurance

Protect Your Business from Unexpected Downtime!

Unexpected events like fire, storm or burglary can suddenly halt your business operations.

How do you ensure that your business is not financially endangered during such an interruption? With business interruption insurance, you create a safety net, allowing your business to continue even in tough times.

Discover how this insurance can protect your business.

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What is Business Interruption Insurance?

Business interruption insurance, also known as business stoppage insurance, protects your company against financial losses resulting from temporary downtime due to damage such as fire, storm, burglary, or water damage.

The insurance compensates for the lost gross profit and fixed costs, such as rent and salaries, ensuring your business continues to generate income during the recovery phase. This insurance provides entrepreneurs with financial security during unexpected events that disrupt business operations.

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What does Business Interruption Insurance cover?

Business interruption insurance typically covers lost gross profits due to:

damage to the building, inventory, and stock
damage from fire, explosion and environmental damage
damage from burglary, theft, and vandalism after a break-in
damage from wind, rain, snow, hail, and water damage
loss of revenue due to road closures caused by a fire
damage to a key supplier or customer
extra costs to get your business running as quickly as possible
costs to inform your customers of a (temporary) closure or relocation of your business

Underinsurance due to unexpected increase in your gross profit

It’s understandable that you can’t always predict how your gross profit will evolve. Sometimes your profit increases faster than expected, meaning you may be insured for too low an amount, resulting in underinsurance and a lower payout in case of damage. Fortunately, insurers offer solutions to mitigate this risk:

Excess of insured amount
If your gross profit at the time of damage is higher than the insured amount (your expected gross profit), you are often covered up to, for example, 130% of this amount. This provides broader coverage in case of unexpected growth.

Guarantee against underinsurance
By reporting changes annually, your coverage remains up-to-date, preventing underinsurance. This guarantee automatically protects you, without the need for interim adjustments, regardless of how your gross profit develops.

This way, you are always well-insured against an unexpected rise in your gross profit.

What does Business Interruption Insurance not cover?

There is no coverage for lost gross profits due to:

natural disasters like an earthquake or a flood
damage caused by renovations, repairs, or cleaning
damage caused by intent or gross negligence
damage from illegal activities or cyber incidents
damage from war or nuclear disaster
foreseeable or gradual damage
inventory and goods. For this, you need an inventory and goods insurance.
fines and the loss of rental income

Examples of damages covered by Business Interruption Insurance:

Example 1: Fire in the company building
A company building is hit by a fire that causes significant damage to the structure and inventory. As a result, the business must close temporarily for repairs. The lost gross profit during the company’s downtime is covered by the business interruption insurance.

Example 2: Burglary and theft of essential equipment
After a burglary in which essential equipment is stolen, the business cannot continue operations until the stolen equipment is replaced. The lost revenue during this period is covered by the insurance.

Example 3: Water damage due to heavy rainfall
A severe storm causes water damage to the stock in a warehouse. The business is temporarily unable to deliver products, losing income as a result. The insurance covers the lost profit during the recovery phase.

Why take out Business Interruption Insurance?

Protection against income loss
When your business can’t operate due to damage, the insurance compensates for the gross profit you would have earned otherwise, preventing immediate financial problems.
Coverage of fixed costs
Even though your business is on hold, costs like rent, salaries, and other fixed expenses continue. A business interruption insurance covers these costs, preventing large debts.
Continuity of your business
The insurance ensures that during the recovery period, you can focus on restarting your operations without worrying about the financial consequences.

What does Business Interruption Insurance cost?

Your premium depends on several factors, including:

the location of your business
the construction type of your building
the industry you operate in
your expected revenue
your expected gross profit
the payout period you choose

In general, the higher the risk, the higher the premium. For an accurate quote, it’s best to request a quote.

Do you want to protect your business against business interruption?

Email: insurance@solarif.com

Phone: +31 26 711 5050

Frequently asked questions

Am I covered for lost profit if my company van is damaged?

Lost profit due to damage to your company van is not covered.

What’s the difference between business interruption insurance and inventory and goods insurance, or building insurance?

With inventory and goods insurance or building insurance, you insure the direct damage to your inventory, stock, or building. These insurances cover material damage, for example, due to fire or burglary.

Business interruption insurance covers the indirect damage: the potential lost gross profit when your business must be shut down, and you earn less or no income.

Who is business interruption insurance for?

Business interruption insurance is especially designed for entrepreneurs whose revenue heavily relies on business assets, suppliers, or a crowd-puller, such as a nearby large retail chain.

Is business interruption insurance mandatory?

Business interruption insurance is not legally required but is highly recommended.