April 25, 2024

Everything you need to know about business interruption insurance

There were more than 40,000 SMEs throughout Luxembourg in 2022. Despite some businesses closing, this number remains constant. Directly effecting the self-employed, this means there are just as many companies to protect against the consequences of a disaster. Business interruption insurance is a type of essential insurance: so, what is it for?

Store sign “exceptional closure, thank you”

What is business interruption insurance?

Business interruption insurance ensures the continuity of your activity through financial support in the event of a major incident. Business interruption insurance comes into play when a company experiences a major blow. It’s there for when an unforeseen event occurs, such as a fire which means your activity is put on hold, particularly while repairs or reconstruction take place. This type of insurance provides a safeguard to maintain your turnover by covering your expenses during this difficult time. 

How does business interruption insurance work?

Business interruption insurance compensates a company for the financial losses incurred as a result of a loss covered by the policy. If your property is insured, fixed costs such as rent and salaries will continue to be paid. You can also decide to pay for other expenses (temporary rental of premises or equipment) to limit the impact of the incident. The insurance reimburses this work interruption, i.e. income, giving the company time to get back on its feet.

 Which claims are covered by business interruption insurance?

Here is a list of risks that business interruption insurance can cover:

  • Fire and electrical damage.
  • Water damage.
  • Glass breakage.
  • Theft and acts of vandalism, etc.

Good to know: your IT assets protected against digital threats

Some insurance companies may cover you in the event of a cyberattack, data theft or external fraud. Foyer offers “cyber pro” insurance forextra peace of mind.

Protect yourself from the financial impact of business interruption caused by a disaster

Business interruption insurance maintains the financial stability of your company if there are any problems.

Financial loss cover

The main advantage of business interruption insurance is the cover of financial losses in the event of a disaster. By maintaining your income during your company’s period of suspension or interruption, this insurance helps your activity stay on track. It not only reimburses the costs incurred by the problem but also takes into account the loss of predicted profit. The amount of compensation paid is based on the company’s gross margin. This can be adjusted according to the expected growth and the economic context.

Support for fixed costs 

When unable to operate it becomes very difficult to pay all the costs that continue to put pressure on your company. Business interruption insurance steps in by reimbursing the fixed costs during the period of inactivity. Here is an overview of the costs that will not stop despite the disaster:

  • Rent
  • Employee salaries
  • Taxes
  • Loan interest
  • Emergency expenses related to restarting, such as temporary rental of equipment or premises
  • Miscellaneous costs

Good to know: No legally defined compensation period  

In general, compensation is paid for between one and 18 months. This depends on various factors such as the time required for the reconstruction of the premises, the deadlines for product manufacturing and the possibility of partially continuing the activity.

Our “all-in-one” insurance solution adapted to your professional needs

Enjoy the flexibility of our business interruption insurance.

Personalised protection in the event of a disaster

At Foyer, we understand the challenges faced by freelancers and SMEs when a disaster occurs. Customise your cover with our “all-in-one” insurance – because your commitments and plans are not identical to those of your business neighbours. Our solution is tailored to the characteristics of your premises, your property and the potential financial losses. For example, a canteen, a warehouse or an office are exposed to individual risks: our insurance is adjusted to suit each.

The assured continuity of your activities

Foyer’s business interruption protection compensates for a decrease in your turnover and helps to quickly restart your business after a disaster. To facilitate the transition and ensure the continuity of your company, we specifically cover the temporary rental of premises or equipment.

To protect yourself from the risks of running a business, you need business interruption insurance tailored to the specificities of your company. In the event of a business interruption after a disaster, it will protect you by maintaining your resources to allow you to restart your activity as soon as possible. Don’t let a fire or another problem threaten the stability of your company – trust Foyer’s experts. They will evaluate your needs to ensure the safety of your business.

Request a tailored offer, starting today.

Three points to remember:

1. Keep your business operational following a disaster to ensure its sustainability.

2. Cover financial losses and fixed costs during downtime to restart with peace of mind.

3. Customise your insurance to maintain your activities after a major blow.

Frequently asked questions about business interruption insurance 

How is the cost of business interruption insurance calculated?

The price of business interruption insurance varies depending on your activity, your turnover and the compensation period selected. 

Can all types of companies sign up for business interruption insurance?

All companies, regardless of their size or sector, can take out business interruption insurance. Business interruption insurance is highly recommended whether you’re craft company, retail operation, industrial business or a service. We insure small business owners, retailers, freelancers, etc.

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