Business interruption insurance 101


If you own a business, you’ve probably heard of business interruption insurance, and you might even have this kind of cover in place already. But how much do you actually know about it? We’ve put together the basics of how business interruption insurance works to help you out.


So what is it, exactly?

Business interruption insurance (also known as business continuity insurance) is there to cover you for any losses you might face if you’re forced to stop trading after an event like a fire or an earthquake. 

It’s designed to help your business return to the same financial position it was in prior to the event so you can resume normal business as soon as possible.


What does business interruption insurance cover?

Based on your financial records, business interruption insurance covers the money you would have earned had the disastrous event not occurred. It also covers operating expenses such as electricity that continue even though your business activities have stopped.

Business interruption insurance helps you to:

  • keep up your revenue stream while your business is closed
  • pay for any additional expenses incurred by the closure, eg. finding a temporary business site
  • meet your financial obligations to the bank, shareholders and staff


Who should have business interruption insurance?

Anyone who owns a business that relies on a physical premises to conduct their work should have business interruption insurance to cover the potential loss of profit they would face if their work location or assets are damaged.

If you own a large retail business, or a small hospitality business, ensuring you can still operate is critical when disaster strikes. Having business interruption insurance will help your business get back on its feet and allow you to keep trading whilst repairs are made. 


Want to make sure your business has the right cover in place? Get in touch with Cactus – we’re the brokers for Kiwi business.

Related articles