Business interruption insurance is a type of coverage that can offer peace of mind if your business has to close due to a catastrophic event.
Although it’s not a policy that can be purchased separately, it can be added to your property insurance or business owners policy.
Planning for the unexpected
2 AM, the phone rings, a fire has erupted at your place of business. As you drive to the scene of the event, your mind is racing and your heart is thumping. Oh, that sinking feeling. Four years of investing and non-stop working to make that business into something good, and now this happens! Just as you’ve landed the biggest order of your career.
It’s disastrous, sure, but that disaster doesn’t have to spell the end of your business. That’s why you need to plan for the unexpected.
Your commercial property insurance or business owners policy will work wonders, by fixing the damage and replacing the lost property in record time. By record time, think in terms of weeks, not days, hours or minutes. Any major disaster will make it impossible for you and your employees to remain on the premises as the repairs are underway. To stay in business, to pay your bills and your employees, you’ll need to get (or make sure you have) business interruption insurance.
Disaster recovered
Property insurance primarily covers your building and the assets within it. What you need right now is to cover your missing revenue and your other business related expenses.
Business interruption insurance covers:
- Lost Income: Profits you would’ve earned during the interruption
- Rent or lease payments: Payments owed to your landlord on your damaged location
- Temporary relocation: Costs associated with moving to and renting a new location
- Employee payroll: Wages for your workers
- Taxes: Federal or local taxes that are due
- Loan payments: Outstanding payments due to creditors
- Losses caused by damage that prevents access to your building: Missing income due to authorities imposing curfews or evacuations in the area where your business is located
Without business interruption insurance, you could be faced with the difficult decision to rent a temporary worksite or permanently close your doors. 40% of businesses don’t reopen after a disaster, and another 25% fail within a year according to the Federal Emergency Management Agency (FEMA.)
Coverage eligibility
There are factors that can impact your eligibility for a business interruption policy. If your business is strictly home based, you may not qualify for coverage. The following can also impact eligibility:
- Industry or classification
- Previous claims
- Location
You’ve invested so much into building your business. It’s important to protect your investment and business interruption insurance can give you that added security to keep your business running for many years to come.
Don’t forget to review your policies periodically with your insurance broker as your business evolves to ensure you always have the right coverages in place.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.
Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.
Written content in blog post: Copyright © 2019 Applied Systems, Inc. All rights reserved.