Why specialist business interruption insurance is the best fit for hospitality businesses

If your clients are in the hospitality business, an unscheduled utilities outage can spell trouble concerning a loss of trade.

Even if your clients have business interruption insurance as part of a business pack policy, it may not adequately cover their losses, warns IUA Senior Underwriter Katrina Campbell.

The IUA difference 

Katrina says that most business interruption insurance policies don’t cover utilities outages until the business has been without electricity for 48 hours or more. In contrast, IUA’s Interruption Insurance Policy provides cover immediately.

“As there's no time deductible for the public utilities extension on our policy, as soon as the storm hits or the winds gust causing utilities to go out, our policy activates from the moment that interruption occurs,” Katrina explains. “Without electricity, hospitality businesses can’t run point of sale and generally can’t cook without electricity, gas or water causing them to shut down.”

Katrina says that the problem with the time deductible on other policies, is that the utilities are usually turned back on within 48 hours. She added that while losing a few hours of trade may not seem like much, depending on the timing of the outage it may cause a significant loss.

“We had a client who lost power on the Friday night before Christmas, and they were fully booked with Christmas parties that night. The power was turned back on by 11 pm, however not being able to open, cost them a huge amount of trade. We paid that claim because we have no time deductible.”

Other advantages of IUA’s policy for hospitality businesses

Katrina says that in addition to the benefit of no time deductible on the public utilities extension, IUA’s Interruption Insurance Policy is a good fit for hospitality businesses as it can be tailored to the unique needs of individual businesses.

She explains that many hospitality businesses have multiple revenue streams within their business. For example, a pub may have gaming, accommodation, a restaurant and a take-away bottle shop.

“In these instances, you could have an interruption event that affects the operations of just one part of the business. The revenues from each part of the business will be shown in their trading profit and loss statement, and if that's provided to IUA, we can complete the calculations on our worksheet, split the sums insured according to the different operations and specify a sum insured for each department,” Katrina says.

“The broker can then show the client exactly how the policy has been set up and they know how it will respond to a loss.”

Find out more 

For more information about IUA’s specialist business interruption insurance cover please visit our website or call us on 02 9307 6659.

Miramar Underwriting Agency Pty Ltd t/as Interruption Underwriting Agencies (‘IUA’) acts under a binding authority as an agent for certain underwriters at Lloyd’s, the insurer of the product.