Material Damage & Business Interruption Insurance

Material Damage and Business Interruption Insurance protects your physical assets and your business income in the event of unexpected disruption – such as fire, flood, storm damage or vandalism. These covers are often bought together and form the backbone of most commercial property or package policies.

Material Damage Insurance (Property Damage)

This covers physical damage or loss to your business assets, including:

  • Buildings

  • Contents and equipment

  • Stock and materials

  • Fixtures and fittings

  • Plant and machinery

It responds to insured events such as:

  • Fire and explosion

  • Flood and storm

  • Theft or attempted theft

  • Vandalism and malicious damage

  • Impact (e.g. vehicle collision)

Business Interruption Insurance

This covers loss of income or additional costs if you’re unable to trade as usual following an insured event that causes physical damage to your property.

Key covers include:

  • Loss of gross profit or revenue

  • Increased cost of working (e.g. temporary premises or equipment hire)

  • Loss of rent (for landlords)

  • Additional staff or overtime costs

  • Loss of utilities or supplier access (if extensions are added)

How They Work Together

Material Damage Insurance covers the physical loss (e.g. your building burns down), while Business Interruption Insurance covers the financial loss (e.g. lost revenue while you rebuild).

Without these covers, your business could face severe financial strain after even a minor incident. Together, they ensure you can repair physical losses and recover financially, keeping your business running.

What a Claim Might Look Like

1. Fire at a Workshop

Scenario:
A fire breaks out overnight and destroys machinery and stock.

Outcome:

Material Damage Insurance pays to replace equipment and stock and repair the premises. Business Interruption Insurance covers lost revenue and staff wages while operations are suspended.

2. Flooding at a Retail Shop

Scenario:
Heavy rain causes a flood that damages flooring, stock and fittings. The shop must close for 3 weeks.
Outcome:

Material Damage pays for repairs and replacements. Business Interruption covers lost sales and extra costs for clean-up and reopening.

3. Theft of Tools from a Trade Business

Scenario:
Burglars break into a unit and steal vital tools and plants.
Outcome:

Material Damage Insurance covers the stolen equipment. Business Interruption may cover delays to ongoing contracts due to tool replacement.

4. Power Surge Damages Production Line

Scenario:
A power surge damages key machinery in a manufacturing facility, halting production for 10 days.

Outcome:

Material Damage pays for equipment repairs. Business Interruption compensates for lost output and contractual penalties.

We Would Love to Hear from You

Let’s talk about how we can improve your coverage, service, and premium. Simply fill in your details, and we will be in touch within 24 hours to see if we can help.