Issues with Business Interruption Insurance
Business interruption insurance covers expenses resulted from a covered loss. It will provide payments loss of income, extra expense and other costs related to interruption.
The causes of business interruption can range from cyber attacks to terrorism. The property damage exposure is one of the most threatening to a business.
The top 4 business interruption issues are:
- Getting the values right. It’s vital to get proper limits and avoid going underinsured. Also, a coinsurance clause included with the policy could decrease the amount of coverage.
- Set the right indemnity period. Test your policy to determine if there is a time element period and whether it includes reinstatement and recovery of profit and incurred increased costs.
- Insufficient supply chain coverage. Manufacturing, importing and wholesaling businesses may have first, second, third and even fourth tier suppliers. It is difficult to trace and control the disruption related to supply chains.
- Lengthy and complicated claims settlement process.
Business interruption (BI) and supply chain, natural catastrophes and fire/explosion top the list of company risks in 2014, according to the 3rd Annual Allianz Risk Barometer, which surveyed over 400 corporate insurance experts from 33 countries.