At a glance
- Business interruption is a notoriously difficult area, with 40% of policies thought to be underinsured
- Insufficient cover can impact on the ability to recover following a loss
- Our free Business Interruption Calculator helps you determine appropriate sums insured and indemnity periods
Business interruption (BI) remains a common area of underinsurance, with around 40% of policies thought to be underinsured.
Insufficient BI cover can result in not receiving a full indemnity, and can significantly impact on customers’ ability to recover following a loss.
To help you tackle this, we have partnered with LMi Group to introduce the Business Interruption Calculator (BI Calculator), a simple online tool to help you assess everything that needs to be included to achieve a more accurate level of BI cover.
Common issue – gross profit sum insured
The sum insured is commonly mis-stated due to misunderstandings over the term ‘gross profit’.
The definition of ‘gross profit’ for insurance purposes differs significantly from what accountants and other businesses may be familiar with, which frequently leads to customers declaring incorrect figures, resulting in underinsurance.
Our new online tool can help with this task, by taking you through a step-by-step process to calculate their sum insured. It also includes guidance notes and clear explanations of all key terms, so that customers understand precisely what information is required and any other factors they need to consider.
For further information on calculating insurable gross profit, take a look at our previous guidance on the subject.
Why register to use the Business Interruption Calculator?
Benefits of using the BI Calculator include:
- Offers a methodical approach to the often-problematic gross profit calculation.
- Minimises the potential for underinsurance.
- Gives you a free, value-added service.
- Can provide a 10% discount on BI premiums.
How does the 10% discount work?
With around 40% of BI policies thought to be underinsured, setting sums insured at their correct levels may result in higher premiums for some customers.
In recognition of this, we are offering a 10% discount on BI premiums for both new and existing customers who use the sum insured the BI Calculator produces at renewal or inception of their policy.
How to register
The BI Calculator is now available for all non-package customers with turnover up to £100m.
To start using the BI Calculator today, or for more information on anything discussed in this article, please speak with your local Zurich contact.
You can also find out more and access helpful guides and insight with our new Underinsurance, Fire and Flood Risk Resources.