Our Riding School Insurance and Livery Yard Insurance experts often find that equestrian business owners opt-out of purchasing business interruption insurance. It seems that this is due to two main reasons, one, not wanting to pay the extra premium, and two, a general lack of understanding of what the cover is and how it can help to keep their business going should the worst happen.
What is business interruption insurance?
Business interruption insurance is one of the most often overlooked business insurance covers, particularly by riding schools and livery yards. That's largely because many business owners mistakenly believe that their insurance protection for buildings and contents will take care of everything, should trade be disrupted by serious damage such as a large fire or flood. However, whilst buildings and contents covers will eventually put the initial damage right, they can’t help with the consequential financial losses your equestrian business may sustain in what could potentially be a long-term interruption to trading. Business interruption insurance will cover your lost income during an indemnity period selected by you, while your buildings and contents are being repaired or replaced.
What is the indemnity period?
The indemnity period is the period of time (usually 12 or 24 months although it can be longer) during which the insurer will cover business interruption losses, starting from the date of the claim incident. When choosing an indemnity period, it’s important to consider the maximum amount of time it would realistically take for your equestrian business to be able to trade again, taking into account such factors as how long it would take to rebuild damaged stables or buildings and replace lost contents. Therefore, it is arguably best to have an over generous indemnity period, rather than one that may cause you to fall short and run out of cover.
What classes as a business interruption?
The two most common causes of business interruption claims are fire and flood. Although essentially, business interruption insurance exists to protect your business from any property related incident that affects its ability to trade, so other causes for a business interruption claim may include burst pipes, storm, theft and malicious damage.
What is the material damage proviso?
Business interruption cover always includes a condition called the material damage proviso. Which is a clause that means the policyholder must have adequate building and contents insurance in place to ensure that any business interruption insurance claim will be honoured.
The purpose of this proviso is to ensure that in the event of damage to buildings or contents at the business premises, funds are available to repair or replace damaged assets. This in turn then reduces the period during which the affected business will be interrupted.
Review your existing covers now
SEIB are happy to review your business interruption cover needs. We will make sure you’re covered on the correct basis, and guide you on selecting a sum insured and indemnity period that are sufficient for your existing business set up, as well as any future growth plans.
We’ve been arranging Riding School Insurance and Livery Yard Insurance for over 50 years. If you would like to request a quote for your Livery Yard Insurance please click here. Most of our horse insurance team own and ride horses themselves and have a true understanding what makes a good livery yard and how much work goes into making one successful.