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Being aware of key factors that may cause business interruption

26 April 2017

In order to stay productive and profitable, every business needs to maintain continuity. If any sort of event comes along that interrupts normal operations, it can be a major blow financially. Unfortunately, such events do happen regularly, which is why so many companies look for insurance policies that protect them against interruptions.

Many companies look for insurance policies that protect them against interruptions.

It helps to know what factors cause these problems in the first place. What brings about major business interruptions? How expensive can these incidents be when they happen? This is basic information that everyone needs to hear.

Identifying primary causes of interruption

So what are the most common reasons why companies need business interruption insurance? According to the Australian Federation of Travel Agents, some of the frequently seen causes of business interruption in Australia are issues with power, transportation and access to data.

If you can't get the electricity to run your company's facilities, this is likely to be a major impediment to getting work done; likewise if your employees don't have access to critical files they need or if they simply can't get to the office at all. If any of these incidents are common at your place of business, you'll need to safeguard against the impact.

Assessing the financial toll of setbacks

What kind of impact, you ask? As many in the business insurance industry have observed, the financial toll of an interruption can be pretty significant. Insurance and Risk Professional noted that in an especially turbulent time, such as during a natural disaster when business is disrupted most, the costs can really add up.

Business interruption can be a major source of stress.Business interruption can be a major source of stress.

In 2011, when an earthquake hit the region, New Zealand dealt with a total of $5 billion in costs related to business interruption, and Australian companies likewise had $3.1 billion in expenses. You never expect events like this to derail your business, but they're always a possibility - which is why insurance for business interruption in Australia is such a valuable asset to have in your back pocket just in case.

So what insurance policies do you need?

At Elders Insurance, we are proud to offer all sorts of business liability insurance policies, including those that specifically guard against interruption issues for Australian businesses.

Of course, we hope no major incidents ever strike your business - but if they do, we'll be ready to cover your lost income and help you get back up and running. You can look to us as a reliable business partner.

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