Business Insurance
Business Interruption Insurance
Repairing damaged premises does not immediately restore trading. Approvals, replacement equipment and returning customers can take longer. Business interruption insurance may help with specified financial losses while a business recovers from an event that meets the policy’s trigger.
What it can cover
Depending on the basis of cover, selected extensions and limits, a policy may include:
- A reduction in insured gross profit, gross revenue or another agreed measure of business income.
- Eligible additional costs of working to reduce the impact of an insured interruption.
- Specified interruption involving suppliers, customers, utilities or access to premises, where an extension applies.
Common risks and exposures
A serious fire may require relocation, replacement of specialised machinery and a gradual return to capacity. Even a short interruption can coincide with a business’s busiest season. Supply-chain dependencies and shared premises can complicate the recovery even where your own assets remain usable.
Who may need this insurance
Businesses whose income depends on premises, stock, equipment or key suppliers may need to assess their recovery exposure. Manufacturers, hospitality operators, retailers and service businesses can have quite different fixed costs, margins and lead times.
What KIB Group considers
- The policy’s definition of gross profit or revenue alongside financial records, forecasts and seasonal trends.
- A realistic recovery timeline covering design, permits, rebuilding, equipment lead times and the return of trade.
- The indemnity period, uninsured working expenses, dependency limits and any separately insured additional costs.
Exclusions and considerations
Traditional property-based cover commonly requires qualifying insured physical damage. A general downturn, voluntary closure or cyber outage does not automatically satisfy that trigger. Waiting periods, sublimits and underinsurance provisions can apply. Accounting gross profit may differ from the policy definition, so using the wrong figure can leave a gap.
Questions worth asking
Is the indemnity period the same as the policy period?
No. The policy period is when the insurance is in force. The indemnity period sets the maximum time over which covered interruption losses may be measured after an insured event. The selected period should reflect recovery of trading, not just completion of building repairs.
Does this insurance cover a supplier shutting down?
Only if an applicable extension responds to the cause and circumstances of that shutdown. Cover can depend on physical damage, location, a named supplier or a specific sublimit. A supplier’s insolvency or commercial decision to stop trading is not automatically insured.
Related insurance
Already need to notify a claim? Business interruption claim notification.
Cover starts with a conversation.
Talk with our Melbourne-based team about your business, wherever you operate in Australia.
This is general information, not personalised financial product advice. Cover varies and is subject to policy terms, conditions, limits and exclusions. Consider the relevant policy wording and your circumstances before deciding; an enquiry does not bind cover.
