Nahaufnahme eines „Closed“-Schilds an einer Glastür, im Hintergrund ein geschlossenes Café oder Geschäft.

Protection in the event of official ordersBusiness closure insurance

Not every business interruption is the result of property damage. One example would be a restaurant closing for several days by order of the health department after the detection of salmonella – even though there was no property damage. In certain industries, government orders may result in a business temporarily shutting down in whole or in part. Business closure insurance serves to cover the economic ramifications of such an order.

When authorities shut down operations

It applies if a competent authority orders a closure or significant restriction of operations on the basis of legal regulations without there being a classic case of property damage.

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When does business closure insurance come into play?

It is particularly relevant to industries in which hygienic, health or regulatory requirements play a central role. These include, for instance, food manufacturers, catering businesses, care facilities or pharmaceutical companies.

If an official action is taken, sales can be lost immediately, while fixed costs continue to accumulate. In contrast to classic loss of revenue insurance, this instance is not based on insured property damage, but arises from an official decree.

What is usually covered by insurance?

Depending on the design of the contract, coverage may extend to, among other things, the reimbursement of ongoing operating costs and lost profits for a specified period of time. The decisive factors are the terms specifically agree upon, in particular the underlying legal references, the insured events, and the time limits.

This area in particular requires a precise review of the contractual terms. Not every official action or every form of operational restriction is insured automatically.

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