For Small to Medium Enterprises (SME’s) and Start-ups

Understanding your Risk Landscape: Property All Risks and Business Interruption

Learn more on how protecting your business and your assets with Property All Risks and Business Interruption cover.

Running a business comes with many types of risk.  Some of these potential hazards can destroy a business while others can cause serious damage that is costly and time-consuming to repair.  Despite the risks implicit in doing business, owners, CEOs and risk management officers can anticipate and prepare, regardless of the size of their business. Through Marsh’s series ‘Understanding your Risk Landscape’, we continue to uncover and explain the major risks that small businesses are exposed to and what insurance covers should be considered to mitigate these risks.

Property All Risks

Property All Risks covers loss arising from any fortuitous cause except those that are specifically excluded.  This is in contrast to ‘named perils coverage’, which applies only to loss arising out of causes that are listed as covered.

Although many industry practitioners continue to use the term “all risks” to describe this approach to defining covered causes of loss in a property insurance policy, it is no longer used in insurance policies because of concern that the word “all” suggests coverage that is broader than it actually is. This is a key aspect to consider when reviewing your policy so that you know exactly what kind of coverage you have in the event of a claim.

What risk am I covered against?

If a risk becomes a reality, a well-prepared business can minimize the impact on earnings, lost time and productivity, and negative impact on customers. For startups and established businesses, the ability to identify risks is a key part of strategic business planning. Property all risk insurance provides coverage to any given property against:

  • Accidental damages
  • Burglary
  • Fire
  • Natural disasters
  • and other unexpected events and mishaps

The trigger for coverage under an "all risks" policy is physical loss or damage to property. The business will need to prove that physical damage or loss has occurred in order to have a successful claim. For example, a small business that experienced a power outage may file a claim citing physical loss.

Risks can happen at any time and can have detrimental effects on your business. Risks such as a fire or a natural disaster can easily cause damage to the physical structure of a building or cause serious interruptions to business operations. This is where Business Interruption insurance becomes critical, as businesses not only need to protect physical assets but also any income lost if there is a business interruption due to the disaster.

Business Interruption Insurance

Business Interruption insurance is coverage that replaces business income lost in a disaster.  This type of insurance is either added to a property/casualty policy or included in a comprehensive package policy as an add-on or rider; it’s not generally sold as a standalone product.

Business Interruption insurance coverage and claims are considered one of the most complex challenges for businesses. Large natural disasters, increased cyber-attacks, and COVID-19 losses over the past few years presented the insurance industry with an unprecedented volume of claims under various coverage endorsements that had previously seldom been contemplated or tested. As history shows, disaster can strike at any time and businesses need to be ready with appropriate insurance coverage to protect its assets and bottom line, as well as a comprehensive plan for recovery and management of the claims process.

Marsh only acts as an intermediary in concluding insurance contract and therefore is not the capacity provider/ insurance carrier.

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