Business revenue insurance protects your business by covering operating costs and replacement expenses if a key person can no longer work.
Premiums vary based on business finance, potential client fallout and the cost of finding a suitable replacement.
It covers lost revenue and recruitment fees, but excludes undocumented income and non-essential employee losses.
How much does business revenue insurance cost?
We can't give you an exact cost because every business is different. Business revenue insurance costs are based on how much it would cost to offset replacing a key person who is no longer able to fulfill their duties due to critical illness, death or disablement. As a result, insurers take these factors into consideration when calculating your premiums.
Finance. Are there any borrowings or financing that needs to be repaid?
Payout. Are there any loans or other payments that are owed to the key person or their estate by your business?
Client Fallout. Are there any client relationships that would suffer irrevocable damage should a key person no longer be handling their account?
Handover. How long would it take to find a suitable replacement and train them up in your company's processes and what would this process cost?
Fallout. What would the immediate costs of losing this key person be to the business? How would this disruption affect your company's profits?
What is business revenue insurance?
Business revenue insurance, as the name suggests, is designed to protect your business' revenue. It provides the funds you need to return the business to the financial position that it was in before a key person was forced to leave or passed away. You can spend those funds on hiring and training a replacement, paying ongoing overheads, rebuilding client relationships, protecting your profit or looking after your revenue in some other way, it is entirely up to you.
The purpose of business revenue insurance is to offer much-needed financial protection for your business. The simple fact is that the loss of a key person could create significant issues for your business that could in turn lead to a loss in revenue. You could lose clients or your business may lack the strategic direction and expertise that your previous employee offered.
What does business revenue insurance cover?
Business revenue insurance claims are decided on a case by case basis and rules vary between insurers. Here's a general overview:
Covered
Loss of revenue
Ongoing operating expenses
Finding and training a replacement
Recruitment fees
Not Covered
Any undocumented income
Non-essential employees or workers
Voluntary closures
Losses due to strikes
What other types of insurance should you consider?
Here are a few other important types of business insurance you should consider taking out:
Commercial property. This looks after our property or its contents if they're damaged.
Professional indemnity. This covers legal costs if your business provides inaccurate advice or poor service to a customer who sues you.
Product liability. This covers legal costs if a product you sell harms someone and they sue you.
Public liability. This covers legal costs and compensation if you cause injuries to someone or damage their property.
Business interruption. This covers lost income if your business is unable to operate. For example, if a storm damages your store and you can't open to customers.
Talk to a broker about business revenue insurance
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If you are ready to speak with a consultant about different business insurance options available, simply enter your details in the form. Keep reading if you want to learn more about the different types of cover available.
Yes, premiums for business revenue insurance are generally tax deductible as a business expense. The Australian Taxation Office (ATO) allows you to claim deductions for most operating expenses used to produce assessable income.
No. Following the landmark Australian court test cases, insurers have tightly updated their policy wordings to exclude global pandemics. Most modern policies feature broad infectious disease exclusions or explicitly rule out cover for outbreaks that trigger government-mandated closures and human biosecurity emergencies, meaning pandemic-related trading losses are generally not covered.
Most policies offer indemnity periods of 12, 18 or 24 months. This period represents the maximum duration the insurer will continue to pay for lost income while your business recovers from a covered event.
Gross profit cover protects your income minus variable costs like raw materials, whereas gross revenue cover protects the total income without those deductions. Service-based businesses often prefer gross revenue cover while manufacturing firms typically opt for gross profit cover.
Yes, many policies include a 'time excess' or waiting period which is typically the first 48 hours to 7 days after the loss occurs. You are responsible for any loss of income during this initial timeframe before the policy begins to pay out.
Yes, home-based businesses can obtain revenue protection, provided they have an underlying business insurance policy that includes property or contents cover. It protects you if an event like a fire or storm makes your home office or workshop unusable.
Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards.
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