An Insurance broker, Abraham Ali, has called for the introduction of Business Interruption Insurance (BII) policy in Ghana to serve as a measure to safeguard businesses in the event of unforeseen situations such as the outbreak of the COVID-19 pandemic.
“The inability of many businesses or corporate entities to survive during these times is due to the absence of such a policy in the country,” he told the B&FT in an interview on why many businesses are still struggling to survive in Ghana.
The policy –an insurance coverage that replaces income lost in the event that business is halted due to direct physical loss or damage, such as fire, natural catastrophes, water damage, supplier failure/lean processes, and pandemics – is not common in Ghana but when considered and introduced could help sustain businesses for economic growth.
“There is one reason why people need to insure their properties for the peace of mind and also to ensure business continuity. With the tourism, hospitality and the rental industries, for example, if the operators had enrolled to the policy, they would have received payment from the brokers or the insurance companies to survive,” he explained.
In this situation of COVID-19, many of business entities are spending money to ensure their survival but he believes that a BII policy would help to replace income one loses if the business cannot open temporarily after a covered loss, like property damage.
According to him, the restoration period of a business interruption coverage is the length of time where the policy will help pay for lost income adding that in most cases, there is a 48 to 72 hour waiting period before the policy kicks in with income coverage.
Every business interruption insurance policy, he stressed, has a coverage limit and the amount of coverage one chooses to have if one suffers a loss.
“Usually with the BII policy, it is a very rare risk that one might not be able to presume just like the COVID-19. Nobody anticipated it with its effects on the economy. For now, if any organization wants to engage in such policy, the broker would have to lead them and consult the insurance company to discuss at length how to get them covered,” he said.