Business Interruption

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Business Interruption

An event that causes a business to relocate or temporarily close. For example, an office may flood and becomes unusable, or a natural disaster may make commerce unfeasible in an entire area. A company may purchase business interruption insurance to guard against losses resulting from this.
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A CHANGING CLIMATE MEANS WEATHER-RELATED BUSINESS INTERRUPTIONS WILL STEADILY INCREASE, MAKING BUSINESS INTERRUPTION INSURANCE ESSENTIAL FOR EVEN THE SMALLEST BUSINESSES.
Both sought insurance coverage for business interruptions. Both were denied coverage.
This may be due to natural disasters such as avian flu, terror threats or other business interruptions such as transport disruption, bad weather, or seasonal events (e.g., student registration).
In the event of a pandemic, Damian Brew, managing director for Marsh in the firm's Financial and Professional Liability practice, would expect to see issues arise from business interruptions due to employee absence, leading to lower revenues and disappointing earnings.
That is, the endorsement usually covers business interruptions that result from physical loss or damage to covered property from a covered peril." (4) Thus, the language of the business interruption endorsement must be read in light of the underlying property damage coverage and the enumerated causes of loss to determine whether a particular interruption will trigger coverage.
While business interruptions can be triggered by a range of events, electric power interruptions are responsible 70% of the time, according to one source.
The article proclaims that "by waiving your company's rights to loss recoveries in exchange for lower prices on contracts-- typically for construction projects, maintenance work, leases and equipment purchases--you face the prospect of deductibles and uninsured losses, business interruptions and cost overruns, as well as longterm premium increases and legal repercussions, not to mention the potential for damage to corporate reputation and lost market share.
Two other industry texts, discussing standard forms using the language "necessary suspension," have acknowledged that coverage exists for partial business interruptions. Rodda, Trieschmann, Wiening and Hedges in "Commercial Property Risk Management and Insurance" (the text for CPCU 3), VoL I, p.
Medaska says small companies are probably the most vulnerable to business interruptions because they don't have the financial base to absorb disruptions for very long.
The Assurex survey found that more than 21% of large employers' systems have been victims of outside hackers, with 15% reporting such attacks resulting in business interruptions lasting from two hours to two days.
They are modelers who specialize in catastrophe assessment and those who advise companies to manage through unexpected crises, or business interruptions.
Even if we do everything right, our systems can be contaminated by outsiders that aren't 2000-compliant and whose faulty data can cause costly business interruptions.

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