Once you have decided on what basis you must plan your business interruption insurance (loss of margin, loss of income, increased cost of working, additional increased cost of working etc?) The next decision is choosing the right length Maximum Benefit Period .
The Benefit Period is the period that the results of companies’ influence for damages, beginning with the date of loss or damage and ending no later than Maximum Indemnity Period. Maximum Benefit Period occurs within Policy Schedule phone. Common maximum benefit period of 12 months, 18 months, 24 months and 36 months. When deciding on the length of time you need to work out how long it would take the company to recover back to trading levels today following a fire, theft or flood. Factors you need to consider are:
What customers would do if you were not providing them? Would you be able to subcontract work so that they are still looked after or it would be likely that you would have lost them for good? How long will it take to replace them?
If your buildings were completely destroyed, how long it would take to get them rebuilt and corporate business again? You must keep in mind the length of would take to get the site cleared, architects appointed, plans drawn up, planning permission agreed (if you are in a listed building), this could take a long time), designated contractors before work could even start …
Is your business seasonal? How long it would take to improve your supply after the loss?
How long it would take to replace or repair machinery and Plant? Some expert piece of plant can have Delivery Lead at six to eighteen months, and then needs to be installed and commissioned. Spare parts for the machine available? Would you rely on a specialized company to carry out repair and, if so, how long you would have to wait for it to be available to perform the work
Unfortunately, there have been plenty of examples where companies have not been able to recover from large losses due to insufficient business interruption insurance the maximum benefits Period and cases where rebuilding work has not been completed before the deadline is not known.
Business interruption insurance can be a complex area. You need to get cover basis, the insurance and the maximum liability period just to help your business to survive a major loss.
I hope you have found this article useful and it will help you when considering the duration of business interruption insurance maximum liability period most suited to your business.