Business Interruption Insurance for Churches
Business Interruption Insurance
We’re a church,
not a business, so
what’s this got to
do with us???
We’ll always find a
space to carry on
teaching our
children – and the
staff will keep
turning
up, so…
What we will talk about…
Why have BI cover?
What sort of damage do I consider when
calculating BI?
Understanding the different types of BI cover
Gross Profit
Additional Costs
Claims preparation
Other
Length of cover
Quantifying the amount of cover you need
What and Why???
BI insurance reduces the financial burden of
operating that may result from damage to your
property (damaged property must be insured for
material damage in order to claim BI insurance).
Assumption that what you are doing is worthwhile in
the Kingdom of God
Others are depending on you to be there
Fiduciary responsibility of trustees
E.g. avoiding bankruptcy!
Avoid negative financial impact on others
Reputation
….
What risk do you envisage when you
calculate your BI insurance cover?
Assumes you DON’T start with what you can afford to
pay in premiums!
Theft – because it’s the most common?
Intentional damage (e.g. someone has broken in
and trashed the office).
Fire?
Flood? Depends where you are.
Tornado?
Earthquake?
Lesson 1
Work out what the biggest risk of financial loss from
one event might be.
Lesson 2
Do your homework thoroughly to calculate the
potential losses – BEFORE you decide how much
business interruption insurance you can afford to
buy.
Types of BI Cover
Refer to policy for definitions
Gross profit
Additional costs
Book debts
Claim preparation costs
Fines or damages
Redeployment costs
Severance and redundancy payments
Other
Lesson 3
Keep the wording on the schedule simple so that
cover is as broad as possible. Avoid any ambiguity!
Lesson 4
If you’re not sure about BI insurance cover, get
advice!
Length of Cover
Policy provides for 3 years.
You can request more.
Which of your operating costs are fixed irrespective
of how long you are out of action, and which are
ongoing until the damaged item is replaced or
repaired?
Is your income affected by how long it takes to
repair/replace damaged buildings/equipment?
Does the impact reduce over time?
How long?
Will depend on type of damage, so plan for worst
case scenario.
Allow for time to obtain consents.
In worst case scenario will other organisations be
competing for engineers/ builders, etc?
Understand your organisation’s decision-making
procedures.
Lesson 5
Don’t underestimate how long it takes for church
bodies to make decisions!
Take that into account when working out the length
of time you think it will take to recover.
Exercises
Divide into 3 groups to consider:
1.
A parish scenario
2.
A diocesan scenario
3.
A school scenario
Lessons
1.
Work out what the biggest risk of damage from one
event might be.
2.
Do your homework thoroughly to calculate the potential
losses – BEFORE you decide how much business
interruption insurance you can afford to buy.
3.
Keep the wording on the schedule simple so that cover
is as broad as possible. Avoid any ambiguity!
4.
If you’re not sure about BI insurance cover, get advice!
5.
Don’t under estimate how long it takes for church
bodies to make decisions! Take that into account when
working out the length of time you think it will take to
recover.
Business Interruption Insurance (BI) is essential for churches to reduce financial burdens resulting from property damage. This insurance covers various risks like theft, intentional damage, fire, and natural disasters. By carefully assessing potential losses and types of BI cover available, churches can safeguard their financial stability in unforeseen circumstances.
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Presentation Transcript
Business Interruption Insurance We ll always find a space to carry on teaching our children and the staff will keep turning up, so We re a church, not a business, so what s this got to do with us???
What we will talk about Why have BI cover? What sort of damage do I consider when calculating BI? Understanding the different types of BI cover Gross Profit Additional Costs Claims preparation Other Length of cover Quantifying the amount of cover you need
What and Why??? BI insurance reduces the financial burden of operating that may result from damage to your property (damaged property must be insured for material damage in order to claim BI insurance). Assumption that what you are doing is worthwhile in the Kingdom of God Others are depending on you to be there Fiduciary responsibility of trustees E.g. avoiding bankruptcy! Avoid negative financial impact on others Reputation .
What risk do you envisage when you calculate your BI insurance cover? Assumes you DON T start with what you can afford to pay in premiums! Theft because it s the most common? Intentional damage (e.g. someone has broken in and trashed the office). Fire? Flood? Depends where you are. Tornado? Earthquake?
Lesson 1 Work out what the biggest risk of financial loss from one event might be. Lesson 2 Do your homework thoroughly to calculate the potential losses BEFORE you decide how much business interruption insurance you can afford to buy.
Types of BI Cover Refer to policy for definitions Gross profit Additional costs Book debts Claim preparation costs Fines or damages Redeployment costs Severance and redundancy payments Other
Lesson 3 Keep the wording on the schedule simple so that cover is as broad as possible. Avoid any ambiguity! Lesson 4 If you re not sure about BI insurance cover, get advice!
Length of Cover Policy provides for 3 years. You can request more. Which of your operating costs are fixed irrespective of how long you are out of action, and which are ongoing until the damaged item is replaced or repaired? Is your income affected by how long it takes to repair/replace damaged buildings/equipment? Does the impact reduce over time?
How long? Will depend on type of damage, so plan for worst case scenario. Allow for time to obtain consents. In worst case scenario will other organisations be competing for engineers/ builders, etc? Understand your organisation s decision-making procedures.
Lesson 5 Don t underestimate how long it takes for church bodies to make decisions! Take that into account when working out the length of time you think it will take to recover.
Exercises Divide into 3 groups to consider: 1. A parish scenario 2. A diocesan scenario 3. A school scenario
Lessons 1. Work out what the biggest risk of damage from one event might be. 2. Do your homework thoroughly to calculate the potential losses BEFORE you decide how much business interruption insurance you can afford to buy. 3. Keep the wording on the schedule simple so that cover is as broad as possible. Avoid any ambiguity! 4. If you re not sure about BI insurance cover, get advice! 5. Don t under estimate how long it takes for church bodies to make decisions! Take that into account when working out the length of time you think it will take to recover.
