Business Interruption Coverage Could Save Your Business

Business interruption insurance offers peace of mind if your business has to close due to a catastrophic event. Although you can’t purchase it on its own, you can add it to your property insurance or business owners policy (BOP).

Planning for the unexpected

Your phone rings at 2 a.m. A fire has erupted at your 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 nonstop 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 BOP will help fix the damage and replace the lost property, but you and your employees won’t be able to remain on the premises while the repairs are underway. To stay in business and pay your bills and employees, you need business interruption insurance.

You’ve invested a lot into building your business, so it’s important to protect that investment. Business interruption insurance can give you the added security to keep your business running for years to come.

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 other business-related expenses.

Business interruption insurance covers:

• Lost income: Profits you would’ve earned during the interruption
• Rent or lease payments: Money you owe 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 and 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 face the difficult choice to rent a temporary worksite or permanently close your business.

Coverage eligibility

Certain factors 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 a lot into building your business, so it’s important to protect that investment. Business interruption insurance can give you the added security to keep your business running for years to come.
Remember to review your policies periodically with your insurance broker. This will help ensure you always have the right coverage in place.