What is it?

Income Stabilisation insurance is simplified business interruption cover. It can be tied solely to those critical periods in a year that drive revenue. In the event of abnormal weather conditions occurring at these times, we would pay an agreed upon amount per day, week, month, or season to offset the shortfall.

Recommended for:

  • Restaurants

  • Theme parks

  • Car washes

  • Ice cream sellers

  • Cinemas

  • Pay for play golf courses.

Scenario 1

The risk

The Seafood Supper Shack is a thriving beachside restaurant in Melbourne, which opens for the summer season of December, January and February, but only on a Saturday and Sunday. The owner Sally doesn’t have another job, so relies on these three months for her annual income. Sally knows that if it rains on more than three of those 24 weekend days, her profits will sink.

The solution

Sally takes out income stabilisation insurance to cover her profits of AUD 10,000 per day, for each day it rains over her three day threshold. Based on her insurance budget she works with us to define the trigger as an incremental accumulation of rain of 1.3cm or more between 11:00 and 23:00 per weekend day between December and March.

Claim

Of the 24 insured weekend days, four of them have an accumulated rainfall of 1.3cm or more. The policy pays out AUD 10,000 to cover her profits or of the 24 insured weekend days, six of them have an accumulated rainfall of 1.3cm or more. The policy pays out AUD 30,000 to cover her profits.

No claim

Of the 24 insured weekend days, three of them have an accumulated rainfall of 1.3cm or more. Of the 24 insured weekend days, two of them have an accumulated rainfall of 1.3cm or more.

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Scenario 2

The risk

PJH Parking manages an overflow parking lot attached to the Montreal shopping mall. Its annual operational costs are CAD 100,000 and it must guarantee the Centre that owns the car park CAD 50,000. Its annual revenue is CAD 200,000. The bulk of its income is attached to the Christmas Season which runs throughout November and December. In unseasonably cold weather however, shoppers will take the train rather than drive due to bad driving conditions and potentially leave PJH Parking unable to meet their CAD 150,000 break even costs.

The solution

PJH Parking works with Weatherproof to analyse the overnight monthly temperature averages between 20:00 and 08:00 to create a bespoke policy which protects the company for 50% of their breakeven costs (CAD 75,000), prorated per day in the event that nightly temperatures average -1°C or below at Montreal shopping mall during the Christmas Season.

Claim

Of the 61 insured days, four record an average nightly temperature (between 20:00 and 08:00) of -1°C or below. The policy pays out a pro rata claim.

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No claim

Of the 61 insured days, none record an average nightly temperature (between 20:00 and 08:00) of -1°C or below.

Scenario 3

The risk

Loop-the-Loop Attractions Inc is a theme park. 40% of the Client’s revenue is generated on just five Public Holidays – these key days make or break the Client’s annual results. Rain occurring in the morning of these critical days means customers will not visit the theme park.

The solution

Weatherproof pays the Client if there is more than 0.50cm of rainfall and/or the average temperature is less than 10°C between 07:00 and 12:00 on the five Public Holidays.

Claim

Either one or both of the perils are triggered e.g. 1.3cm of rain falls between 07:00 and 12:00 on one of the insured days and/or the average temperature is under 10°C. The policy pays out for each one of the five days upon which this trigger occurred.

No claim

Neither peril is triggered e.g. 1.2cm of rain falls between 07:00 and 12:00 on one of the insured days and/or the average temperature is over 10°C.

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