The risk of interruption to business is too great not to give it due consideration. But while the true cost of the interruption may be impossible to predict, there are important factors to consider when evaluating Business Income Insurance. You need to make the right choices so your business doesn’t have to suffer.

Projecting Sales

Your Business Income Insurance policy will be primarily based on your company’s sales income. Which makes correctly calculating your projected sales vital. The most effective way to do this is to base your projections on your previous year’s experience. Establish trends based on these figures, supporting these trends with results and influencing factors. Allow for market trends such as expansion and fluctuation in production. The most vital point to consider when calculating your projected sales is to work towards sales that would have happened, realistically, not sales that could happen.

Gross Profit

The objective of Business Income Insurance is to cover the loss of income arising from an interruption. A common mistake is to consider this as the net profit, however the policies are designed to cover the reduced earnings of the company. What is generally taken into consideration in these policies is the company’s net profit plus any continuity expenses


While your business is interrupted, a point to be considered is the time staff may spend bringing the company back to life. Both hourly and salary staff may be required to work in the adverse conditions in an effort to resume normal operations. If an executive is required to devise strategies for operation during the interruption, your Business Income Insurance should aim to cover this expense. To overlook this may run the risk of missing out on vital staff skills required for returning to normal operations.

For your company to bounce back after an interruption, your Business Income Insurance must give consideration both to what may take place during that time and also the potential impact on your business. Paying attention to crucial details like that will work to minimize the damage done.

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