April - May Mag Issue 25 Paperturn - Page 31



Aston Lark
Business Interruption – are you
insured for long enough?
AVRO - TRADE CREDIT
The right Business Interruption cover can mean the difference between getting
TRADE CREDIT INSURANCE
OFFERS
FINANCIAL
back up and
running and MORE
going out ofTHAN
business if JUST
you’re unfortunate
enough to
suffer
a
major
incident.
PROTECTION
Trade Credit insurance offers more than
just financial protection, it gives companies
the power to protect their funds, grow
their business and control their future. It
can provide certainty in turbulent times,
something many businesses value now
more than ever.
What is Trade Credit Insurance?
In its simplest form, it is a way in which
companies can protect themselves if
customers who owe money are unable or
unwilling to pay. It can be broken down as
follows:
• Cover is provided for insolvency or if a
buyer refuses to pay
• This is backed up with legal assistance –
insurers are a force to be reckoned with!
• Different types of cover are available, for
example, all customers, specified
customers (five or more)
• It fits around your existing accounting
procedures
• Cover is typically for 12 months, although
some insurers offer two-year deals
Essentially it allows you to conduct business • How do you protect against customer
Whilst many operators purchase this insurance, they often don’t buy enough cover which can lead to being underinsured.
in
the
knowledge
that ifwon’t
youprotect
don’ta business
get paid
insolvency?
– cash/reserves/credit
This
means
that the insurance
throughout
the full cycle of i.e.
a claim,
leaving businesses high and
by
the
insurer will step in.
checks/nothing in place.
dry the
whencustomer,
cover is needed
most.
To explainare
this further,
the purpose
of Business
Interruption
covernot
is to maintain
the turnover
of the business
insured incident.
There
many
reasons
people
might
• Who
decides
howfollowing
muchancredit
new Cover
andis
limited by time, referred to as the Indemnity Period, as well as by the Sum Insured. The Indemnity Period starts on the day of the insured incident.
pay
you – insolvency, lack of cash, or delays existing customers should have? Could
It will end when:
in them being paid themselves. So it’s a
having this backed by an insurer help?

theadvantage
business has madeto
a full
recovery
to where it wouldin
have
been if the incident hadn’t happened, or
huge
have
something
place

the
day the
indemnity
period ends, whichever comes first.
that
puts
you
in control.
• Do you often have a clash between credit
control
andand
sales/operations?
So, if the indemnity period is too short, cover will end before the business is back
up and running
the operator will be left to face the rest of the
Trade
Credit
is not
a “one
recovery without
any insurance
financial support from
insurance
cover. size fits
all” solution; Aston Lark will work with you
• Who do you use for legal action to recover
to
create
a personalised
offering
tailored to
debts?
Iscan
the
cost
known
upfront?
Let’s
take a look
at some of the common
timescales
Whilst
business
resume
as usual,
it can take
a business many
following
an incident:
your
business.
additional months to fully recover to the position they were in before
incident
occurred.to
Remember,
Interruption
insurance
can
Ifthethe
answer
any ofBusiness
these
is ‘no’,
get in

Three months - Following a major incident, for example a large
provide cover for Loss of Gross Profit until that Gross Profit is no longer
Implement
confidence.
touch.
We’ll try and build some certainty for
fire, insurersgrowth
will carry outplans
a forensicwith
investigation
to establish the
affected by the incident – the cover does not stop the moment the
cause
before cover
can be confirmed
and any
workaccess
can start to
Trade
Credit
insurance
gives
you
your
business in a world which is currently
premises is reinstated.
reinstate
buildings
etc.
To
make
the
building
safe,
gain
access
and
to highly valuable reports about the ‘health’ far from providing this.
conclude this initial report can take an average of three months.
of companies
you are planning to do

Six monthswith,
- Any significant
on the premises
will need in
recommendation:
business
sectorwork
insight
and activity
IfOur
you’d
like to learn more about Trade
planning permission. The average time to obtain this, including
the marketplace, all of which can enable
Credit
please
don’t
to
12 months’insurance,
cover is never enough.
At Aston
Lark wehesitate
always recommend
time for plans to be drawn up, is six months.
a minimum
months,
proper consideration
be given to
businesses to implement growth plans with give
meofa24call
onbut01732
386766needs
or toemail

Nine months -It
After
the incident,
it’s likely
that work
can start on
how long it would take for your business to recover.
confidence.
can
free up
capital
which
chris.chapman@astonlark.com
repairing or rebuilding the premises. Whilst the recovery operation
can then be used for growth, making it a
may have been able to continue on a whole or part basis, any
genuine
asset
for sales
your
business.
vehicle repair,
storage,
or other
activity may not have been
If you’d like to discuss your
possible unless alternative premises have been found on a shortBusiness Interruption cover,
termafford
basis in theto
local
area. more on my
I can’t
spend
give me a call on
insurance
now…

15 months –right
A rebuild
of premises could take six months, meaning
01732 386766 or email
the operator can begin to kit out premises around 15 months postchris.chapman@astonlark.com
We incident.
appreciate that cost is a factor for
most
people
now
ever,
but has

16 months
- Provided
that more
machinerythan
lost in the
initial incident
ordered
and has arrived, answer
six weeks should
be allowed
for
canbeen
you
confidently
the
following
fitout and commissioning.
questions?
Businesses prosper in times of certainty
and stability and good cash flow is vital to
ensure the smooth running of any business.
That’s where Trade Credit insurance can
• Who is your largest customer or
help – it enables you to do business in the
outstanding balance? How hard would it
Aston Lark Limited Registered in England and Wales No: 02831010
Ibex House, 42–47
Minories,
London EC3N
knowledge that if your customers don’t pay, Registered
be tooffice:
replace
those
funds
if 1DY
they went into
Aston Lark Limited is authorised and regulated by the Financial Conduct Authority.
you have a back-up plan.
financial difficulty?
AL-COMM-005-0220
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31

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