Business interruption insurance (also called business income insurance or BI insurance) replaces the income your business loses when it can’t operate normally due to a covered event such as fire, storm damage, flood, or equipment breakdown.

Think of it this way: your property insurance pays to repair or replace the physical damage. Business interruption insurance keeps your business financially alive while those repairs happen.

These two covers are often confused. Here’s the simple distinction:

Both are important. They work together, not in place of each other.

Business interruption insurance is relevant for any business that:

• Operates from a fixed premises
• Would suffer significant income loss if forced to close, even temporarily
• Has ongoing fixed costs that continue regardless of trading status
• Employs staff who would still need to be paid during a closure
• Has a supply chain, customer base, or trade cycle that would take time to rebuild

It’s particularly important for:

• Retail and hospitality businesses – where revenue is tied directly to foot traffic and physical premises
• Trades and professional services – where specialist equipment or client relationships take time to rebuild
• Agricultural businesses – where a loss event can affect an entire season’s income
• Manufacturing and warehousing – where equipment downtime has immediate and significant income consequences

Claim calculations can be complex, which is another reason getting the cover right from the outset matters.

Most policies use one of two methods:

Gross profit basis – covers the difference between your revenue and the cost of goods sold, adjusted for any savings made during the closure (such as reduced wage costs if some staff were stood down).

Gross revenue basis – covers total revenue lost, without deducting variable costs.

The method used affects both how your sum insured is set and how your claim is calculated. A broker will help you understand which basis is appropriate for your type of business.

Business interruption insurance is one of those covers that businesses rarely think about… until they need it. And by then, it’s too late to change it.

The right policy is more than just a tick in a box. It’s a genuinely tailored piece of protection that accounts for your industry, your revenue, your fixed commitments, your premises, your supply chain, and the realistic timeline it would take for your business to recover from a serious loss.

At Dudgeon Berry Insurance Group, we work with business owners, many of them in regions where we’ve seen first-hand what happens when businesses aren’t properly covered. We’re an independent brokerage, which means we work for you, not for any single insurer.

If you haven’t reviewed your business interruption cover recently, or if you’re not sure whether you have it at all, we’d encourage you to get in touch. A conversation with one of our brokers costs nothing and could make an enormous difference when it matters most.

Contact our team today to arrange a business insurance review.

This article was prepared by the team at Dudgeon Berry Insurance Group, independent insurance brokers serving businesses across Northern NSW and the Gold Coast. It is intended as general information only and does not constitute personal advice. Please speak with a qualified broker about your specific needs.