In today's article, we'll focus on the rules for paying flood-related compensation to affected businesses under their Business Interruption insurance. Damage to business property resulting from various types of accidental events often forces business downtime. Therefore, the insurance chosen by businesses should cover not only losses related to property damage but also the consequences of production interruptions, which can seriously impact the company's stability and financial liquidity. This type of insurance is most often used by businesses in the manufacturing services sector. Although most companies are insured against property damage, many do not protect themselves against the consequences of business interruptions, which can be more severe than material losses alone.
Business Interruption Insurance (hereinafter referred to as " BI "), or loss of profit insurance , is a type of insurance policy aimed at entrepreneurs. BI protects entrepreneurs against financial losses caused by interruption in business operations. This interruption can be the result of random events, such as floods, fires, machinery breakdowns, damage caused by third parties, or other unforeseen events that prevent the normal operation of the business. This insurance is available only as a supplement to property insurance. To ensure that your insurance covers all costs associated with business interruption, you should carefully review your policy and the General Terms and Conditions of Insurance, particularly regarding any potential grounds for exclusion of the insurer's liability.
Business interruption insurance (BI) covers profits that a company could have generated had the business not been interrupted. It covers fixed costs that the business still has to incur despite its temporary interruption, such as equipment rental or leasing. Insurance may also cover additional costs incurred by the company to minimize losses, such as renting alternative premises or equipment, or other temporary solutions. Business interruption insurance covers the period during which the company was unable to operate due to damage, until it can resume normal operations. This period may be limited in the insurance contract, for example, to 12 months. The main goal of business interruption insurance is to ensure financial continuity even in the event of unexpected events.
For more information, please contact us. We will assist you at every stage of the process to obtain the compensation you deserve.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of September 30, 2024
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