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Summer Update #1 – Business Interruption

The first in a series of articles from BHIB, offering advice for businesses and consumers during the summer months!

During the summer, many people’s thoughts turn to holidays. It’s all about summer clothes, sunscreen and sunglasses but from a business point of view it sees a very busy period, with increased activity and often with less staff. 

The change in the seasons often sees some businesses booming, whilst others experience a low period before ramping up activity levels for later in the year. For example, a fashion company may well have some products that see no seasonality in their income. But the business might rely on sales peaking to coincide with seasonal changes, where the vast majority of income is achieved. An incident affecting their non-seasonal stock could have minimal effect on the business.

However, if a whole summer’s stock was lost, it could be catastrophic. Companies who outsource much of their manufacturing are particularly exposed to such risk. The stock for the summer season may arrive in relatively few shipments and if the stock is lost, there will be little prospect of the suppliers having the time or capacity to manufacture replacements. It could see the business lose the majority of the income, but it could also see an impact on their ability to get shelf space with customers next summer, as the space has been taken by a competitor.

You can download our cover overview on business interruption insurance, alternatively we’re always on hand to offer advice and guidance in all areas of cover including business interruption, so get in touch if you would like fuss free advice and guidance. We’d love to hear from you!