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12 reasons your technology firm should have business interruption insurance

Often overlooked by technology firms, business interruption insurance is a crucial product that can helps your business continue to trade by protecting loss of revenue following a property damage claim.

Although your professional indemnity, property and liability insurance covers you against liability claims made by customers, employers and members of the public – what will keep your doors open if a key supplier suffers a property claim which impacts on your ability to trade?

Written by Kate Slater on 15th April 2015

12 reasons your technology firm should have business interruption insurance

 

Often overlooked by technology firms, business interruption insurance is a crucial product that can helps your business continue to trade by protecting loss of revenue following a property damage claim.

Although your professional indemnity, property and liability insurance covers you against liability claims made by customers, employers and members of the public – what will keep your doors open if a key supplier suffers a property claim which impacts on your ability to trade?

This is where business interruption insurance comes into play, and here are 12 reasons why you should have the product as part of your current policy:

1 - Financial losses from insured damage
If your business has incurred a property loss from insured damage, business interruption insurance can cover the subsequent loss of gross profit, as long as property was damaged on your premises.

2- Extended Indemnity Period
A standard business interruption policy will cover the reduction in your rate of gross profit for a period of 12 months after the insured loss. Consider if this will be long enough to fully reinstate both your equipment and your order book. If not then consider 24 or 36 month indemnity periods.

3 - Denial of access
Insured damage to other property in the vicinity that prevents you from accessing your own property can be claimed on your insurance.

4 – Bomb threat
The suspected presence of an explosive device within your premises, or in the vicinity, for more than four hours can be claimed for the policy. Often hampered by curfews created by the police or British Armed Forces, the insurer will adhere to the regulations but may not pay out if damage is caused by the explosive.
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5 – Suppliers
When a suppliers’ workspace is damaged it automatically affects you and your ability to operate, especially if the damage causes the supplier to halt production.  

Cover can be purchased for a maximum limit to cover all UK suppliers, alternatively insurance can be arranged with a set limit for specified suppliers anywhere in the wold.

6 – Customers
Any of your customers that suffer a similar fate as discussed with suppliers, which ultimately affects you, can be covered on the policy.

7 – Utilities
If your business is without water, gas or electricity for more than 24 hours, and the supplier is at fault, your interruption insurance would cover any costs incurred. Cover can be further extended to include all accidental damage to pipes and cables up to the terminal ends at your property.

8 – Telecommunications
With technology firms relying so heavily on their telecommunications system to deliver a phone and internet operation, when this goes down, at the fault of the supplier for more than 24 hours, you will be able to claim any costs incurred as a result on this too. Again cover can be further extended to provide full terminal ends insurance.

9 – Property and stock
Insured damages incurred in your property, in transit, or being stored in a third party premises are also included.

10 – Cyber attack
A claim can be sought from the policy if a cyber attack leaves your business interrupted for more than a specified period. The incident can only be claimed against if it occurs during your period of insurance.

11 – Equipment breakdown
Whether your computer system, servers of other IT equipment breaks down leaving you unable to either trade or work, can be claimed too.

12 – Additional Increased Costs of Working
A standard business interruption policy will include cover for the extra costs you incur at the time of a claim in order to keep the business running such as overtime or extra property rental charges. However the insurer will limit these extra payment to an "economic limit” meaning that the amount spent must be less that the amount saved by spending the money.

The Importance of Getting it Right
Poorly arranged Business Interruption insurance is the single largest cause of reduced claims settlements. It is crucial to work with a broker with expertise in the technology sector and takes the additional time to fully understand your business.

For more information on business interruption insurance and other products to protect technology firms, download our free eBook, Franklands Guide to Protecting your Technology Business here.


 

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