When you’re managing your own business, it’s all too easy to feel like there are a plethora of potential pitfalls that you’ll need to account for. From staff shortages to client loss and even to planning in the event of a natural disaster, ensuring that you can keep your enterprise afloat in unexpected situations can often feel like half the task of business management in itself.

Thankfully, there are options out there for both identifying and combating potential business interruptions, ranging from business insurance to risk mitigation processes. And if you’re a complete novice to the concept of ‘business interruptions’, then rest assured, this is the read for you.

Stick with us as we dive deeper into business interruptions and how modern entrepreneurs can keep their own budding enterprises well-protected.

What are business interruptions?

First, let’s start off with a working definition of ‘business interruptions’. As their name suggests, business interruptions refer to any incidents or events that may inhibit your business from operating. In other words, an incident or event that prompts your enterprise to close its doors or cease operations in any capacity, can be deemed to be a business interruption.

Generally, business insurance providers do offer cover that protects against business interruptions. This cover is typically industry-specific or at the very least can be tailored to suit the unique needs of that business. Because of this, it’s imperative that business owners maintain a clear understanding of the business interruptions that they are most at risk of experiencing. Developing this understanding can simplify the process of securing business interruption insurance.

How to identify potential interruptions for your business

Identifying the interruptions that your business is most likely to face can be done by considering the size of that business, the nature of its operations, the locations of all of its premises, the industry it occupies, and in some cases even the industries that it interacts with. Conducting business risk assessments at regular intervals can help business owners maintain an awareness of the risks that are most likely to affect their enterprise.

Risk assessments can also be used as a resource for developing company policies and processes designed to minimise the likelihood of risks occurring or even to minimise the impacts of these risks. Developing evacuation plans, emergency protocols, and following workplace health and safety guidelines are all examples of measures that can be taken to minimise risks identified during your business risk assessments. We’ll be providing more examples of risk mitigation measures and processes throughout this guide.

What are the most common types of business interruption?

The COVID-19 pandemic provided its fair share of business interruptions over its years of lockdowns and restrictions. The lockdowns themselves inhibited workers from leaving their homes, which prompted millions of businesses to either close their doors or use digital technologies to conduct their daily operational activities wherever possible. But there were more potential interruptions throughout the pandemic than just the requirement for workers to isolate themselves.

The pandemic also put a halt to global trade activities, which in turn inhibited many businesses from receiving shipments from their suppliers. Any events that affect a company’s ability to make or receive shipments or maintain standard production processes, can also be referred to as a business interruption.

Here is a list of commonly occurring incidents or events that can be categorised as business interruptions:

  • Natural disasters (e.g. fires, flooding, earthquakes, etc.)
  • Extreme weather events
  • Supply chain failures
  • Office computer network failures
  • Damage to company equipment
  • Damage to company premises
  • Cyberattacks
  • Employee deaths or illnesses

You may be able to equip your business with an insurance policy that provides cover for these events. Typically, you can expect insurance providers to offer both policy inclusions and extras that reimburse business owners and their staff if their company experiences any profit loss as a direct result of any business interruptions.

Which businesses are most likely to experience interruptions?

As you can see per the list above, business interruptions can come in a wide variety of forms, from the physical to the digital and everything in between. Because of this, business interruptions can occur for virtually all kinds of businesses. 

There’s no denying, however, that businesses with multiple premises are mathematically more at risk of experiencing business interruptions. Organisations that are composed of multiple workplaces or worksites and of a larger body of staff, are faced with more opportunities to experience business interruptions.

Because of this, larger organisations must develop clear-cut risk management strategies alongside securing business insurance policies that protect their revenue streams in the event of a business interruption that affects multiple worksites and staff members.

How to protect your business against potential interruptions

Now that you have a solid understanding of business interruptions and some select measures to alleviate the negative effects of these events, you may now be thinking about just how you can use these measures and other similar strategies to protect your own enterprise. 

Of course, protecting your business against all of its potential interruptions requires more than just business insurance alone. Whilst business insurance should be considered to be a foundational measure when it comes to business risk mitigation, it’s paramount that business owners invest in the development of their own risk management strategies. These strategies can help prevent business interruptions from occurring. Taking a proactive approach to your business’ risk management is always best, as it helps protect both your staff as well as your clients.

For example, if your business comes across a cyber threat, investing in a strong cybersecurity strategy can help protect your enterprise and reduce the risks of experiencing any revenue loss as a result of this business interruption. Similarly, having extreme weather or natural disaster protocols in place can also help keep your business operational if any worksites are affected by adverse weather conditions. 

Business interruptions can occur at any time, and often with very little warning. Thankfully, maintaining an awareness of which types of interruptions may be most likely to affect your business can help you and your staff stay prepared and adaptable. 

By securing business insurance and developing risk mitigation and management processes, you can equip your enterprise with a strong chance of staying productive and profitable even in the face of the most unexpected business interruptions.