Demystifying Business Interruption Insurance for Offices

What is business interruption insurance?

BI insurance responds when a business suffers a reduction in income due to physical damage from an insured peril — fire, flood, escape of water, or vandalism, for example — that makes their premises unusable or significantly impairs operations.

Typically, BI insurance will cover:

• Loss of income that would otherwise have been generated by the business
• Normal operating expenses that continue even when operations are suspended, such as salaries, rent, and loan payments
• Extra costs incurred to minimise disruption and help the business resume operations (e.g. hiring temporary space, outsourcing tasks)

For office-based businesses, having the ability to access premises, people, systems, and data is essential to keeping operations running. So when an unexpected event such as a fire or flood forces an office to close, the business can find itself unable to generate income — even if the building itself isn’t destroyed. For professional firms, especially those whose services are billed by time spent, this can present an immediate threat to financial continuity. As a result, business interruption insurance — or business continuity insurance — becomes a critical form of loss of income insurance for many firms.

“Business interruption insurance helps keep a company financially stable when an unexpected incident stops normal operations,” said Dan Edge, Portfolio Manager at Travelers Europe. “At Travelers, our BI cover offers more than the industry standard. It gives brokers a chance to strengthen their clients’ risk resilience and further set their proposition apart.”

While cover protects earnings, most BI policies apply a time limit as selected by the policyholder, commonly 12 or 24 months. It’s important to set this limit correctly to meet client needs — but it can be difficult to predict how long it might really take to be fully back up and running following a major loss. It’s important to check the insurer’s policy wording to ensure appropriate levels of cover. Travelers goes further by offering an unlimited time period option for legal sector businesses (see below for more detail).

Why business interruption cover matters for office-based firms

Even for organisations that do not manufacture goods or store stock, BI cover is still critical. Professional service businesses like legal practices, consultancies, architecture firms and accounting firms face financial loss the moment they cannot access files, systems, or client-facing facilities.

For many of these firms, the ability to bill for time is their business model. If that time cannot be delivered, revenue evaporates.

Across this sector, Travelers has developed a suite of BI solutions that go further than most carriers, with a particular specialism in legal firms. It includes:

These features help ensure that office-based businesses return to their pre-loss financial position as quickly and fully as possible.

How BI cover can keep a business running

Even when employees can work from home, BI cover is still necessary to keep many businesses afloat in an emergency. Consider this example: an architecture firm experienced smoke and water damage from a fire in a neighbouring property. Critical IT systems were destroyed. The business, which relied on on-site servers and specialist software, was deemed unfit for use. Employees were unable to access client files or bring in revenue and the firm had a sizeable business interruption claim.

Fortunately, their BI cover provided £60,000 per month of lost gross revenue; temporary space, equipment hire, and data recovery; and accountancy fees to help prepare the claim. For a three-month business interruption, a total settlement of £200,000 was provided.

“In this example, BI cover helped a business quickly resume operations, maintain cash flow, and retain clients — outcomes that would not have been possible otherwise,” Edge said.

Why it matters for brokers

It’s common for BI to be misunderstood — or undervalued — by professional service clients, yet these businesses may be among the most exposed: they depend entirely on access to people, premises, data, and technology. According to Edge, “Many clients may argue that all of their employees could ‘work from home’ following a major disaster at their premises, but this isn’t good enough in 2025 – they still need fully functioning systems and access to files. This is where high levels of BI cover, alongside a professional business continuity plan, are critical to clients.”

For many office-based organisations, BI cover means the difference between temporary interruption and permanent closure. This is protection that can help a business continue trading without missing a beat — preserving its earnings, client relationships and reputation in the process.

To find out more about Travelers Office Insurance solutions, visit https://www.travelers.co.uk/what-we-cover/office-insurance.

This article is provided for general informational purposes only. It does not, and it is not intended to, provide legal, technical or other professional advice, nor does it amend, or otherwise affect, the provisions or coverages of any insurance policy issued by Travelers. Travelers does not warrant that adherence to, or compliance with, any recommendations, best practices, checklists, or guidelines will result in a particular outcome. Furthermore, laws, regulations, standards, guidance and codes may change from time to time and you should always refer to the most current requirements and take specific advice when dealing with specific situations. In no event will Travelers be liable in tort, contract or otherwise to anyone who has access to or uses this information.

Travelers operates through several underwriting entities in the UK and Europe. Please consult your policy documentation or visit the websites below for full information.

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