Does putting your business on hold have to mean putting your cash flow on hold too?

Does putting your business on hold have to mean putting your cash flow on hold too?

When it comes to insurance, the first thing that comes to the minds of business owners is usually protecting their business property and their responsibility to the public. However, they underestimate the need to protect their cash flows in the case that an accident requires you to put your business on hold.


Following a serious accident, more often than not, a long period of time is required to get your business back on track. But sometimes, even minor accidents can leave your business inoperable for extended periods of time. You may receive compensation for your damaged property, but what about the profits that you could be earning during that time, where will you be getting cash from? We have witnessed a case where a client had shut down their business for 2 months due to an air-conditioning unit breakdown , causing the shop-owner financial distress due to the loss of cash flow from their business. To protect yourself against the loss of income due to the temporary shutdown of your business, you need business interruption insurance.


Typically, insurance companies do not provide Business Interruption as a separate insurance product. It can be included or removed from your business insurance policy at your own discretion. As long as you have included Business Interruption cover in your insurance policy, in the case of an accident, for example, a fire or any unforeseen physical loss or damage which is covered by the insurance company, you will be compensated for any consequential income loss.  Additionally, the insurance company can cover any additional costs (Additional Increased cost of working cover) that arise during the course of you getting your business back on track.


If you want to know more about Business Interruption Cover, feel free to call our Eternity Team to have a throughput discussion.

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