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Business Interruption Insurance

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How much does business interruption insurance cost?

The cost of business interruption insurance in New Zealand typically averages between $40 – $80 per month. Costs in New Zealand can vary widely, with factors such as the nature of the business, geographical location, and the risk profile of the industry playing a key role in determining premiums.

What is the average cost of business interruption insurance? 

Businesses in New Zealand typically pay between $40 – $80 or around $700 annually for their business interruption insurance

It is important to note, however, that larger businesses, particularly those in niche industries with unique facilities or premises that would be difficult to replace, will pay higher costs due to the increased risk and potential loss associated with their operations.

Understanding business interruption cost factors

Three major factors that influence the cost of business interruption insurance are:

The Nature of Your Business

The more risk inherent in your operations, the higher the cost of your business interruption insurance. For instance, a restaurant with a high risk of fire will likely pay more than a retail store. Similarly, a manufacturing firm with complex machinery could incur higher costs than a consulting agency with minimal equipment.


Your business location plays a significant role in determining your insurance premium. If your business operates in an area prone to natural disasters such as earthquakes or floods, your insurance costs will be higher. Likewise, businesses in high crime areas may face increased premiums due to the elevated risk of theft or vandalism.

Insurable Gross Profit

Insurable Gross Profit is a key factor in determining the cost of business interruption insurance. It is calculated by adding the net profit and the standing charges (fixed costs that don’t decrease even if the business isn’t operational) together. A higher insurable gross profit means a higher potential loss for the insurer in case of business interruption. Therefore, businesses with a higher insurable gross profit typically have to pay higher premiums for their business interruption insurance.

Business interruption provides cost-effective protection for your business

Business interruption insurance offers a financial safety net when unexpected events disrupt your operations. It provides:

Coverage for Lost Revenue

When unforeseen circumstances halt your operations, the insurance will cover the revenue that your business would have generated during the interruption period. This allows you to continue meeting your financial obligations such as payroll, rent, and loans.

Funds for Temporary Relocation

If your business premises become unusable due to a covered event, the insurance can help cover the cost of moving to a temporary location. This enables you to resume operations faster, maintaining your customer base and reputation.

Payment for Extra Expenses

If your business needs to incur additional costs to expedite recovery and minimize downtime, business interruption insurance can provide coverage for these expenses. This could include costs such as rush delivery of equipment or hiring temporary staff.

It’s crucial to have business interruption insurance if:

  • You operate in a disaster-prone area
  • You rely on specific premises for operations
  • You have substantial monthly fixed costs
  • Your business model involves complex machinery

How can you save on your business interruption insurance?

Even though business interruption insurance is a necessary investment, there are ways to make it more affordable. Here are three strategies:

Staff Costs

In the aftermath of a major disaster, some businesses may find it necessary to let go of non-essential staff to reduce expenses. This reduction in staffing could potentially decrease the amount of coverage you need, subsequently reducing the cost of your business interruption insurance. However, this strategy should be considered carefully, taking into account the potential impacts on business operations and employee morale.

Implement Risk Mitigation Measures

By demonstrating that your business is taking steps to minimize potential risks, you could potentially lower your insurance premiums. This could include installing security systems, maintaining up-to-date and well-serviced equipment, or having robust disaster response plans in place.

Engage our business interruption insurance brokers at Gerrards

Here at Gerrards, we know the ins and outs of business interruption insurance. Our team of insurance brokers is equipped to guide you through the process of selecting the most suitable and affordable insurance policy. We have an extensive network of insurance providers, and our job is to negotiate on your behalf, compare offers, and secure the best rates for you.

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