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Business revenue insurance

If a business owner or key employee dies or can’t work, business revenue insurance can help you meet operating expenses.

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By

Gary Ross Hunter

Updated

Fact checked

Key takeaways

  • Every business needs a plan in case one of its owners or key employees passes away or becomes disabled and unable to work.
  • Business revenue insurance can provide cash to meet your regular operating expenses and financial support to find a suitable replacement.

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

Frequently asked questions

Gary Ross Hunter's headshot
Editor, Insurance

Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

Gary Ross's expertise
Gary Ross has written 698 Finder guides across topics including:
  • Health, home, life, car, pet and travel insurance
  • Managing the cost of living
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