Business Interruption Insurance can assist hotels, restaurants and other hospitality companies in transferring some of the risk incurred when the business has its operations disrupted, resulting in a partial or total loss of business income. Like other forms of insurance, business interruption insurance purports to transfer the risk of revenue loss from the company to its insurer under certain circumstances. Effective risk transfer requires, however, that the hospitality company identify and then quantify the precise risks that it wishes to transfer.
The purpose of this article is two-fold. First, a checklist of potential risks is provided for the company to evaluate against its current or proposed business interruption policy. And second, this article identifies other issues to be considered by the company in its assessment of its current or proposed business interruption policy.