Business Interruption

Should you arrive at work one day to see the results of the fire or earthquake that has destroyed your factory, or the burglary of the server that has lead to all of your data being lost, or the flood that has shorted all of your electronic equipment, will you be able to resume business on the spot and do you have the cash on hand to do so?

A Business Interruption policy from Apex can assist. This is insurance that replaces reduction in turnover following a claim under your Material Damage policy. The Apex Business Interruption policy has agreed NZbroker wordings with many of New Zealand’s largest insurers.

Cover will include such items as:

• Gross Profit/Gross Rentals
• Additional Increase in Cost of Working
• Claim Preparation Fees

Additional Increase in Cost of Working is essentially those costs not planned for but lead to the reduction in turnover being mitigated. This could include setup costs at a new (or temporary) premises, the additional rents that may be incurred, advertising and marketing costs.

Claim Preparation Fees are for the professional claims-maker who works on your behalf to ensure that you are getting exactly what you are entitled to when you are entitled to it. This could include such as progress payments towards wages and other costs.

Extensions of cover will usually include:

Dependencies – should a loss occur at a customer or suppliers premises meaning you cannot supply to your customer and your business suffers a reduction in turnover
Utilities – failure of electricity, water supply etc that leads to a reduction in turnover. The Maui gas installation is NOT included.
​• Prevention of Access – should a loss occur at a close-by business that denies access to your business that leads to a reduction in turnover.

Further extensions can be arranged for Natural Disaster and Terrorism if required.

As with most insurance policies the idea is to protect the balance sheet of a business and ensure continuity and viability of that business. Should the business have to pay out of its own reserves or facilities then the balance sheet is weakened. Not insuring adequately or at all can potentially lead to the end of the business.

No business should be without this cover.

Apex can provide cover for all of your insurance needs, whether Property, Liability, Marine, Accident & Health, Trade Credit and beyond. We tailor-make to your requirements dependant on your business needs.

Claims examples:

– Following a fire at a meat works there was substantial rebuilding required. The works was the main employer in town and if it had not had Business Interruption insurance there would have been devastation to the community, any wages to be paid would have had to be met from reserves and the company could not afford this. The other businesses dependant on those wages would have suffered as well.

– Following a water-leakage at a business the computer systems were damaged and the staff could not work at the premises due to the leakage being unsanitary. The business suffered additional costs in relocating staff and a reduction in turnover including the loss of a customer that had been budgeted for in the coming year. The additional costs, the fees paid to the claims maker and the reduction in Gross Profit were all covered​

To discuss further or for any queries, please contact your Apex Broker or our Technical Manager, Sue Dillion: sue@apexinsurance.co.nz