One of the most important insurance covers for a mine is Business Interruption (Gross Profit) insurance. This cover primarily enables a mine to claim for the impact on insured Gross profit due to lost production because of physical damage to insured property or other key external events, such as damage at a supplier’s or customer’s premises. Increasingly businesses are also getting contingent business interruption cover often triggered by non-physical damage events. The intention is to restore the business to the same financial position as if the loss had not occurred.
For instance, if there is an incident that delays production for six months, the entire mine plan will be pushed back. Metal prices may change during the downtime hence affecting the income of the mine when it eventually restarts operations. Further other fixed costs will continue to be incurred.
Business Interruption insurance protects the earnings and cash flow of the mine allowing it to meet standing obligations like plant maintenance, salaries and gross profit projections during the downtime period.
A proper business interruption limit is not a thumb-suck figure. A proper process of calculating it is required to ensure that when the loss occurs the cover is adequate to protect the mine. As Firstlink, we guide clients through this process which entails a number of issues like:
We also look at the core insurance policy scope of cover, exclusions and to get the right levels of deductibles or excesses suited to the mine’s unique operations.
Talk to us today about Business Interruption Insurance cover for your mining operation.
By Tichaona Chihambakwe
Head Business Development and Marketing – Firstlink Insurance Brokers.
