Tax definition and business interruption protection - financial expert explains costs, definitions and insurance.

Tax definition and business interruption protection - financial expert explains costs, definitions and insurance.

According to a report from www.trialog-magazin.de,

As an economic expert, it is important to analyze the potential impact of business interruptions on the market, the consumer and the industry. Business interruptions can occur due to various causes, such as cable fires, burst water pipes or hacker attacks. These can lead to high levels of damage, such as the VW plants, which suffered an estimated loss of 100 million euros.

Surveys also show that entrepreneurs are concerned about business interruptions. According to the Allianz Risk Barometer, 46 percent of respondents consider business interruptions to be a top issue, the greatest risk for their companies. With a view to the war in Ukraine and the associated effects, such as more cyber attacks or unsecured electricity and gas supplies, these risks suddenly appear more concrete.

Business interruption insurance can help cushion the financial consequences. Nevertheless, only a few medium-sized companies afford such insurance, even though the costs are usually considered business expenses. It is important to check individually what protection the company needs and which insurance definition plays a role.

Insurance companies have precise definitions for business interruption, and it is important to clarify when the policy applies and what costs the insurance covers. Furthermore, business interruption insurance makes sense because it can relieve companies of the high costs in the event of a business interruption, at least to a certain extent.

It is important to minimize the causes of business interruptions and take effective long-term countermeasures. This includes smart solutions against a power outage, sufficient safety instructions and effective protection against cyber attacks.

Before taking out business interruption insurance, entrepreneurs should clarify with experts whether the insurance actually covers all relevant risks and is clearly defined in the contract. This is crucial in order not to be left empty-handed in the event of a business interruption, as happened to many companies at the beginning of the corona pandemic.