The Heathrow shutdown – a costly disruption
On 21st March 2025, a major power outage at Heathrow Airport resulting from a fire at one of the international airport’s electricity substations caused unprecedented disruption, leading to the cancellation of over 1,350 inbound and outbound flights and the first full shutdown of the airport in 15 years.1
Cancellations not only stranded thousands of passengers but also had a ripple effect on businesses reliant on Heathrow’s operations. From airport retailers losing a full day’s trading to global supply chain interruptions caused by delayed cargo flights, the far-reaching economic impact of the outage will prove to be significant. It has been estimated that financial losses from the closure could amount to hundreds of millions of pounds.2
This event highlights the crucial need for businesses to re-assess their resilience strategies, including business interruption insurance. By understanding potential risks and implementing comprehensive coverage, your business can ensure financial stability in the face of unexpected disruptions such as these. Without adequate preparation, even a temporary shutdown can lead to significant revenue loss, operational setbacks, and long-term reputational damage. Read on to discover the true extent of the impact and how you can safeguard your business from similar risks in the future.
What happened?
The power outage, which left 4,900 homes without electricity and forced 150 people to evacuate surrounding properties, brought Heathrow Airport to a standstill.3 With over 20 international airports, including JFK, Madrid, and Amsterdam, having to accommodate diverted flights, the disruption extended far beyond UK borders. Data from Russell Group estimates that, at the time of closure, Heathrow had 109 aircraft on the ground valued at approximately $8 billion.4 This congestion and redirection created logistical challenges, adding further complexity for businesses dependent on efficient air travel.
How were businesses affected?
The Heathrow shutdown had widespread consequences, with many businesses facing unexpected financial losses:
- Airport retailers and hospitality: Shops, restaurants, and taxi services operating within Heathrow lost a full day’s trading, affecting revenue and cash flow.
- Logistics and supply chains: Cargo flights faced delays and redirections, disrupting deliveries and impacting businesses relying on timely shipments.
- Corporate travel disruptions: Business travellers faced rescheduled or cancelled flights, affecting critical meetings, contracts, and productivity.
- International impact: With major airports worldwide having to handle diverted flights, congestion and operational inefficiencies added further strain on global aviation networks.
Specialist insight: Graham Meacher’s take on the impact
Graham Meacher, Sales Director of Commercial Insurance at NFP, highlighted the wider implications of the Heathrow outage:
“The closure of Heathrow Airport isn’t just an airport issue – it shows how connected our economy is. Companies from global logistics firms to local airport shops are suddenly facing unexpected losses. Events like this underline why businesses need solid emergency plans and ways to manage risks effectively.
Being proactive and prepared for possible disruptions - not just reacting after the fact - is key for businesses today, especially as risks continue to evolve and increase. We’ve noticed more businesses looking closely at business interruption insurance after events like the Heathrow closure. They’re recognising it’s a necessity, not just an optional extra.”
What is business interruption insurance?
Business interruption insurance is designed to cover lost income and additional expenses incurred when a business is unable to operate due to an unexpected event. However, it is not a standard coverage included in most property policies. Coverage can vary significantly, particularly when it comes to utility service disruptions.
For businesses affected by the Heathrow outage, successful claims for contingent business interruption would depend on their policy including utility service interruption coverage. If a policy does not explicitly cover a particular peril, contingent business interruption coverage will not be triggered. Many businesses focus solely on direct risks, but indirect disruptions - such as supply chain failures or service interruptions - can also have severe financial consequences. Without proper planning and the right coverage in place, businesses may find themselves unprotected in such scenarios.
How NFP can help protect your business
The Heathrow power outage serves as a stark reminder of the unpredictability of operational risks. NFP provides specialist guidance in risk management and business interruption insurance, ensuring businesses have tailored policies that account for potential disruptions.
Our team helps businesses identify vulnerabilities, assess their existing policies, and secure comprehensive coverage that includes critical contingencies like utility service interruptions and supply chain risks. With proactive planning and the right insurance strategy, businesses can mitigate the financial impact of unforeseen disruptions and maintain operational stability.
To learn more about how NFP can help safeguard your business from unexpected events, get in touch with our team today.
Author
Graham Meacher, Sales Director - Commercial Insurance
Throughout his 30-year career, Graham has helped businesses of all sizes navigate complex risk landscapes, providing tailored insurance solutions that protect their assets and drive growth. With a deep understanding of the evolving insurance market, his expertise spans a wide range of industries, ensuring businesses receive comprehensive coverage suited to their unique needs.