Indemnity Periods And Why They’re So Important
When taking out a new insurance policy, it’s important you understand exactly what your policy covers as failure to do so may leave your business underinsured or unable to fully recover after a disaster. This is a common problem with Business Interruption (BI) insurance as policies are defined by both the indemnity period and the sum insured.
So what is an indemnity period?
The indemnity period covers the time that claims can be made after a business loss. They are often set periods that correlate with the nature and size of the business, and the estimated time of recovery. Once the indemnity period expires, any claims made will not be fulfilled, hence the importance of choosing a suitable indemnity period.
As well as restoring the business to it’s previous state in terms of buildings and equipment, BI policies are designed to provide continued support in winning back customers and training new staff for example. Therefore, indemnity periods should account for the ongoing operations as well as immediate recovery.
How do you decide a suitable indemnity period?
People are often optimistic about how long their business will take to recover, but you should always plan for the worst-case scenario. That way you won’t risk underinsurance and will be able to fully recover your businesses to its previous state.
For more information on the importance of choosing an appropriate indemnity period for your business, contact Insync Insurance today. We can advise on suitable indemnity periods to meet your business needs and all of our policies can be tailored so that you only pay for the areas of cover you need.