Protecting Your Business: Understanding Business Interruption Insurance

Running a business comes with its fair share of challenges, and sometimes unforeseen events can disrupt your operations, impacting your bottom line. That's where Business Interruption insurance steps in, providing a safety net that can help you weather the storm and keep your business afloat even in the face of adversity.

According to the recent Allianz Risk Barometer (which identifies the most important corporate concerns across 94 countries), business interruption ranks as the second most concerning risk, second only to cyber risk (with which it is also closely interlinked).

Whether it’s the result of a fire, flood, storm, a machinery breakdown, or even a cyber incident, a business interruption policy can help make sure your business keeps running smoothly. It protects your cashflow during a temporary crisis, ultimately allowing you to reset, recover, and rebuild.

Key Benefits of Business Interruption Insurance:

Income Protection

Business Interruption insurance provides a crucial layer of protection for your business income during a period of interruption. This can help you meet financial obligations and maintain stability until you're back on your feet.


By helping you cover ongoing expenses, BI insurance supports the continuity of your business even when you're unable to operate normally. This can prevent long-term financial setbacks and potential closures.

Recovery Assistance

The funds from your Business Interruption insurance policy can be used to expedite your business's recovery process, allowing you to reopen sooner and minimise the impact on your customers and reputation.

Employee Support

Business Interruption insurance can assist in paying employee salaries and benefits, ensuring that your valuable staff members are taken care of during the interruption period.

causes of business interruption

What Does Business Interruption Insurance Cover?

Business Interruption insurance, often referred to as BI insurance, is a type of coverage designed to safeguard your business against financial losses caused by unexpected interruptions or disruptions to your normal operations. These disruptions could be the result of various events, such as natural disasters, fires, accidents, and other unforeseen incidents that force you to temporarily close your doors or reduce your operations.

Business Interruption insurance can cover the loss of any sales you would have made while your business is out of action, plus any extra costs you incur to stay open. More specifically, it can cover:

Lost Income

Business Interruption insurance can cover the income your business would have generated if it had been able to operate as usual. This helps bridge the gap between your regular earnings and the reduced income during the interruption period.

Ongoing Expenses

The policy can cover ongoing fixed expenses such as rent, utilities, lease payments, and loan repayments, even if your business is temporarily unable to operate.

Employee Wages

Business Interruption insurance can help cover the wages and benefits of your employees during the interruption period. This ensures that your workforce remains supported even if your business operations are disrupted.

Temporary Location Costs

If your business needs to operate from a temporary location while your primary location is being repaired or restored, the insurance can cover the additional costs associated with setting up and running from that alternative location.

Supply Chain Disruptions

If your business relies on suppliers or customers, and disruptions to their operations impact your business, the policy might cover the financial losses you experience as a result.

Extra Expenses

If you incur extra costs to minimize the impact of the interruption or to expedite the recovery process, Business Interruption insurance can help cover these additional expenses.

Denial of Access

If authorities prevent access to your business premises due to a covered event, Business Interruption insurance can cover the resulting financial losses.

Dependent Properties

If a disruption affects properties on which your business depends, such as suppliers, customers, or distributors, Business Interruption insurance might cover the financial impact.

Business Interruption Insurance In Action

Take, for example, a recent fire that destroyed the kitchen area of a restaurant. Whilst the property was covered, the 8 weeks that it took to rebuild the kitchen meant a lost income stream of $100,000. Fortunately, the restaurant had an adequate Business Interruption policy in place, meaning they could cover their fixed costs whilst the damage was repaired.

Who Can Benefit From Business Interruption Insurance Cover?

Business Interruption insurance is ideal for a wide range of businesses across various industries, especially those in more complex industries, and those who operate in areas that are prone to severe weather events.

Below are a few examples of businesses that are particularly well-suited for Business Interruption insurance coverage:


Retailers, whether operating physical stores or online platforms, depend on steady sales to sustain their operations. Unexpected incidents like fires, supply chain disruptions, or other accidents can result in reduced income

Hospitality & Tourism
insurance for hospitality industry

Hotels, restaurants, travel agencies, and tour operators heavily rely on consistent customer flow. Disruptions caused by natural disasters, pandemics, or other unexpected events can lead to significant income losses.


Manufacturing operations often involve complex supply chains and production processes. Any disruption to these processes, whether due to equipment breakdowns, supply chain issues, or natural disasters, can lead to financial losses.


Medical practices, clinics, and hospitals require a continuous flow of patients for revenue. Events like fires, equipment failures, or health emergencies can lead to patient cancellations and income loss.

Entertainment & Events
business interruption insurance for entertainment and events

Event organizers, theaters, and entertainment venues can face cancellations due to weather, accidents, or regulatory restrictions. Business Interruption insurance can help cover lost income and recovery costs.

Get Your Business Interruption Quote Today

While Business Interruption insurance might seem like an additional expense, the peace of mind and protection it provides are invaluable in maintaining your business's resilience and success.

Contact Midland Insurance Brokers today. Don't leave your valuable assets, employees, and operations exposed to risks. Our team of business insurance experts is ready to assist you and provide the comprehensive coverage you need to keep your business moving forward with confidence.

Either fill in the 'Request A Quote' form on this page and one of our brokers will be in touch, or you can give us a call on 1300 306 571.

Request A Quote

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