An ISR policy can include Business Interruption cover, traditionally referred to in some ISR wordings as Consequential Loss.

This section is designed to address the financial impact of an interruption following insured physical damage.

What can Business Interruption cover? #

Depending on the basis of settlement, cover can include:

• Loss of gross profit.
• Reduction in turnover.
• Increased costs of working.
• Additional expenditure.
• Certain continuing expenses.
• Other insured consequential losses.

For example, a fire may damage a factory but the larger financial loss could come from the business being unable to operate for several months.

Does any business interruption trigger a claim? #

No.

Traditional ISR Business Interruption cover generally requires insured physical damage that results in the business being interrupted or interfered with.

Other forms of interruption may require specific extensions or separate cover.

What is the indemnity period? #

The indemnity period is the maximum period over which an insured Business Interruption loss can be measured following an insured event.

It should be long enough to allow for matters such as:

• Demolition.
• Design and approvals.
• Rebuilding.
• Machinery replacement.
• Recommissioning.
• Restocking.
• Regaining customers and turnover.

Selecting an indemnity period that is too short can leave a significant uninsured exposure.