Business Interruption Insurance
Replaces the gross profit you lose, and pays the extra cost of keeping trading, while your business recovers from insured fire or other damage.
Business Interruption (BI) insurance in Kenya, also written as Fire Consequential Loss or Loss of Profits cover, replaces the gross profit a business loses while it recovers from insured damage to its premises, and pays the extra cost of keeping trading in the meantime. It is written alongside Fire & Perils, because it only pays when the damage itself is an insured loss. The premium is rated on the annual gross profit you insure, including wages if you choose to cover them: typically about 0.25% of that figure a year, before discounts for a long-term agreement or a clean claims record. The indemnity period, most often 12 months, should match how long rebuilding and winning back customers would really take. Vike sizes the gross profit and the indemnity period with your accountant so a claim is not cut back for underinsurance.
- Typically about 0.25% of insured gross profit a year, before discounts
- Pays lost gross profit plus the increased cost of working
- Written with Fire & Perils: it follows an insured damage claim
- Indemnity period usually 12 months, longer for complex rebuilds
- Wages and claim-preparation audit fees can be included
Rates shown are typical market rates, given as a guide only. Your actual premium is set by the insurer after underwriting and depends on your risk, sum insured, claims history, and security; government levies are added.
Reviewed by Lawrence, Broking Manager, Vike Insurance
A fire policy rebuilds the premises and replaces the stock. It does not pay the rent, the salaries, and the loan repayments that keep falling due while the doors are shut, or replace the profit on the sales you cannot make. Business Interruption insurance does: it pays the gross profit you lose during the indemnity period, plus the extra cost of trading from temporary premises, hiring equipment, or outsourcing production so you keep your customers.
Vike places BI alongside Fire & Perils for manufacturers, hotels, hospitals, retailers, and warehouses. We work from your audited accounts to set the insured gross profit, agree an indemnity period that reflects the real rebuild and recovery time, and check that wages and audit fees for preparing the claim are included, because those are the gaps that most often reduce a BI settlement.
What It Covers
Loss of gross profit from reduced turnover after insured damage
Increased cost of working to keep the business trading
Wages for staff retained during the shutdown (if selected)
Auditors' and accountants' fees for preparing the claim
Loss following damage at a key supplier's or customer's premises (extension)
Loss when access to your premises is blocked by damage nearby (extension)
Loss following failure of public utilities such as power or water (extension)
Who It's For
Manufacturers whose output stops if the plant is damaged
Hotels, restaurants, and hospitality businesses
Hospitals, clinics, and diagnostic centres
Retailers and supermarkets with high fixed costs
Warehousing and logistics operators
Any business with loan repayments that continue through a shutdown
Types We Cover
Each profile is rated and underwritten differently. Talk to us so we can match your specific situation.
Gross Profit Basis
The standard form for trading and manufacturing businesses: insures turnover less the variable costs that stop when trading stops. Rated on the annual gross profit, typically about 0.25% of it a year.
Gross Revenue Basis
Used by service businesses such as professional firms, schools, and hospitals, where revenue rather than a trading margin is the natural measure of loss.
Increased Cost of Working Only
For businesses that can keep trading after damage but at extra cost, such as renting temporary premises or outsourcing. Cheaper than full BI, but it does not replace lost profit.
Machinery Loss of Profits
Extends the same protection to a machinery breakdown rather than a fire, for plants where one failed machine halts production.
Real-World Scenarios
Factory fire halts production for eight months
Fire & Perils rebuilds the factory and replaces the stock. Business Interruption pays the gross profit lost over the eight months, the salaries of the skilled staff kept on, and the cost of outsourcing urgent orders so key customers are not lost to a competitor.
Hotel kitchen fire closes the restaurant
The rooms stay open but the restaurant and conference business stop for three months. BI pays the lost gross profit on food, beverage, and events, and the increased cost of catering for residents from a temporary kitchen.
Underinsured gross profit cuts a claim
A business insured last year's gross profit of KSh 40M, but had grown to KSh 60M by the time of the fire. The insurer applies average and pays only two thirds of the loss. Vike reviews the insured gross profit every renewal against current management accounts to avoid this.
Optional Benefits & Add-ons
Wages cover (dual basis or full payroll)
Suppliers' and customers' extension
Denial of access
Public utilities failure
Claim-preparation (auditors') fees
Machinery loss of profits
Availability varies by underwriter. Our advisors will confirm what is available on your chosen policy.
Frequently Asked Questions
Do I need Fire & Perils to buy Business Interruption?
How much does business interruption insurance cost in Kenya?
What is the indemnity period?
How do I work out the gross profit to insure?
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