Business as usual? The ins and outs of business interruption
If something happens to your hotel or restaurant, you might think your insurance covers any loss you suffer. In reality, there’s a good chance business interruption won’t be included automatically. So, what is it and how can it help?
Hotels and restaurants face constant risks in their everyday business. Guests coming and going all day long, a team of staff to manage, contractors and sub-contractors coming and going, the storage of sensitive data, lots can go wrong.
If a situation does occur, general insurance would include the cost for the damage caused. This might include physical damage to your buildings, replacement costs for your stock or legal costs to defend yourself in a claim made against you.
But what happens if damage to your building means that some rooms are not fit for purpose, limiting the possible profit long-term? What if your equipment malfunctions, leaving your head chef side-lined and your restaurant suffering the consequences?
This is where business interruption can assist you.
The moment your business experiences a harmful situation, a loss occurs. But that loss doesn’t always end when that situation is resolved.
Here’s an example.
Your hotel suffers a flood and some of the rooms have water damage.
Your regular business insurance covers the cost to deal with the water damage and the damaged contents of the rooms.
The rooms no longer suffer water damage, but they are not ready to be used by guests. As such, you have had to turn down bookings which you would’ve accepted had the incident not occurred.
Here, the loss from the flood includes the damaged rooms, the contents of the rooms AND the consequential loss which has come after the room was repaired.
At Full Time Cover, we use business interruption insurance aims to cover this for you. It aims to place you in a position as though the incident never happened in the first place.
What else should I consider?
When we source business interruption for you, we need to know your buildings sum insured. Essentially, buildings sum insured gives an accurate estimation of how much it would cost to rebuild your business’ building from scratch.
If your sum insured isn’t accurate and disaster does strike, you will be forced to make up the remaining costs of the rebuild. Costs can quickly build up, too. You might hire contractors, the materials you want to use could be hard to source or no longer available, staff could decide to leave which forces you to pay for recruitment costs, as well as an array of other issues.
However, if your sum insured is undertaken by a competent insurance broker looking after your best interests, you can feel the relief that, despite the chaos that may ensue, your business won’t suffer financially from it all and you’ll have the help and support to get you back up and running as soon as possible.
To find out more about how business interruption insurance can help your hotel or restaurant, get in touch with the team at Full Time Cover now.