Business Interruption Cover for Your Health and Wellness Practice
As a business insurance broker, I'd like to discuss an essential aspect of protecting your health and wellness practice: Business Interruption Cover (BI Cover). While it may not be the most exciting topic, it's crucial for safeguarding the future of your business.
Understanding Business Interruption Cover
Business Interruption Cover is designed to protect your business income in the event of a closure caused by unforeseen circumstances. For health and wellness practices, this cover is vital as it shields your business from financial hardships caused by disruptions such as fires, floods, or other catastrophes.
The Importance of BI Cover
A survey conducted by CGU of nearly 500 small businesses revealed that one in four would not survive if they had to close their doors for three months. Businesses with BI Cover are better positioned to endure such situations. The policy covers lost revenue and ongoing expenses throughout the recovery period, ensuring that critical functions can continue and the business remains stable [1].
Beyond Financial Protection
The value of BI Cover extends beyond mere financial loss. Without this support, your practice could face:
- Mounting debts
- Difficulties in paying staff
- Challenges in reopening in a timely manner
- Strain on relationships with customers, staff, and suppliers
While the premium for BI Cover may appear as an additional expense, it's a valuable investment when considering the potential consequences.
Ensuring Adequate Coverage
To ensure your wellness centre is properly protected, consider the following steps:
- Consult a qualified accountant to assess the appropriate limits for your coverage based on your business's income and regular expenses.
- Utilise BI Cover calculators to estimate the recovery period following a disaster and determine the amount of revenue that will need to be replaced.
- Work with an experienced insurance broker who can tailor a policy to your specific needs, including additional options such as coverage for outstanding accounts or increased costs of operation.
Case Study: BI Cover in Action
Consider the case of a wellness centre that experienced a fire in its infrared sauna, causing damage to two relaxation rooms. This incident led to a 25% reduction in the centre's business operations. The centre's BI Cover played a crucial role in its recovery by:
- Compensating for lost revenue due to reduced operations
- Covering additional expenses related to repairs and restoration
With this support, the wellness centre navigated the aftermath of the fire without severe financial repercussions, maintaining its financial stability and continuing to serve clients.
Hidden Costs Covered by BI Cover
BI Cover can protect your practice from various hidden costs that may arise during a business interruption, including:
- Staff salaries
- Temporary relocation expenses
- Loss of gross profit
- Ongoing lease or loan payments
- Professional fees for claim preparation
- Increased rebuild costs due to demand surge
Without adequate coverage for these hidden costs, the financial burden on your wellness centre could be significant, potentially leading to longer recovery times or difficulties in fully reopening.
Preparing for the Unexpected
Business Interruption Cover is an essential layer of protection for your health and wellness practice. By safeguarding against financial loss and ongoing expenses, BI Cover provides the best opportunity to recover from unexpected disruptions without excessive financial strain.
I encourage you to reach out to discuss how we can protect your business with the right BI Cover. Together, we can ensure that your practice
is prepared for unforeseen circumstances, allowing you to focus on what matters most – the health and wellness of your clients.
To review all insurances, including Healthcare Professionals Indemnity/Medical Malpractice insurance, Public Liability, or any other
business coverages please click here to arrange a one-on-one consult with a
dedicated broker. Alternatively, use the links on this page to find out more about types of cover and how to best protect your clients,
employees, and the financial welfare of your business in the future.
