BUSINESS INTERRUPTION INSURANCE
Business Interruption or Loss of Income is a section available on both commercial and hospitality insurance policies, but in this instance we will focus on Business Interruption for the Guest House / AirBnB industry.
Why do you as a Guest House or AirBnB owner need business interruption insurance?
Guest Houses and AirBnB owners earn no income if there are no guests – this can happen naturally in the winter months, but imagine that an event occurs over the peak season that means you have to turn away guests and refund deposits. Your source of income is promptly taken away and even deposits received have to be returned.
The financial repercussions of such an event could cause irreparable harm to your business and your pocket.
What is business interruption insurance?
Business interruption is the specific type of cover that provides protection for the loss of profits and continuing fixed expenses resulting from a break in your commercial activities due to the occurrence of a specific peril.
What does business interruption insurance cover?
The aim of business interruption insurance is to place you, the Guest House owner, back into the same position as if the event had not occurred. Typically it covers:
- Income / profits you could have earned had you not had to cease operations due to an insured peril.
- Some operating expenses that may still have to be paid even if the business is temporarily not operating.
What type of instances would need to occur for my Business Interruption to cover me?
- Prevention of access
- Failure of public telecommunication.
- Total or partial failure of public utilities, including sewerage.
- Loss of income as a result of food poisoning, infectious diseases, vermin defective sanitary arrangements
- Loss of income following a shark or animal attack in the immediate area or a bomb threat/oil spill.
- Cancellation of a sporting or cultural event – within 50km.
- Staff stay-aways, legal or otherwise.
- Loss of income following an accident resulting in death or hospitalization for a key member or murder/rape/suicide within 1km
- Failure of any essential equipment.
- Abnormal noise at any neighbouring premises
- Inappropriate behaviour by a member of the insured’s staff.
- Loss following accidental damage.
Incompass works with the very best in the short term letting / hospitality industry and would be delighted to discuss your insurance needs and provide you with a free quotation based upon your specific circumstances.
To contact Incompass, the Guest House Insurance experts, email risk@incompass.co.za or complete our “Contact Me” form HERE