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How to prepare for business interruption through fire or theft

What to do if the unthinkable happens

Possible threats

Burglary and fire are probably equally devastating for any business. A theft may result in not only the loss of computer equipment but irreplaceable data, so keep copies of all essential material. It may be a bore at the end of each day but you would be very glad of the effort if the computer disappeared one night.

Threats depend very much on the business you are in. If you have clients walking in and out of a shop all day, shoplifting is probably a high risk. In-store cameras and even security guards may well become part of the furniture.

Fire is equally bad news and often the effects are longer lasting. The building may need repair or redecoration and you may be dependent on the landlord sorting it all out with their insurers before work can even start.

Such delays could put your business under. You may be covered for the physical losses but the interruption to work may be the difference between survival and going under.

Business interruption cover is often sold as part of a standard office package. Again check the small print to make sure it is applicable to your needs and adequate in terms of financial recompense.

It may have to cover the lease of a replacement building for some months as well as the cost of losing regular custom. Most general policies will cover losses for a 12-month period. If your business is likely to suffer for a longer period, then make sure the cover is extended.

But be warned, business interruption will only kick in if the peril was insured. For example, a hotelier suffered a power surge at their premises which resulted in all the telephone lines going dead. They tried to claim for the resulting loss of business but failed because the original peril – the power surge – was not an insurable event.   Making a claim

This is fairly straightforward. If you used a broker, a quick call to their office gets the ball rolling. Depending on the severity of the claim, the insurer will either settle quickly or send round an assessor to oversee the claim.

Many shops with large glass frontages will be provided with freephone access to a glass repair company. The business simply calls them up and pays the agreed excess to the repairer and that is an end of the matter.

If an assessor calls, the more information you can provide the better – receipts for computers help enormously, for example.

It is also worth remembering insurers will want to get you back in operation as rapidly as possible. It will cost them as much as it costs you if you cannot get restarted

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