Business Interruption Insurance

3/19/2020 (Permalink)

Business Interruption Insurance can be vital to your small business. Ask your insurance agent for more information.

Business Interruption Insurance can be vital to your business. Too many small business owners fail to think about how they would manage if a fire or other disaster damaged their business. Business Interruption Insurance can be added to a property insurance policy or included in a package.

Business Interruption Insurance - What Is It?

Business Interruption Insurance covers the loss of income that a business suffers after a disaster, be it due to a disaster-related closing of the facility or the rebuilding process after a disaster.

But I Already Have Property Insurance. . .

Property insurance policies only cover the physical damage to the business. A Business Interruption Insurance policy covers the profits that would have been earned. It is designed to put a business back into the same financial position it would have been had no loss occurred.

Typical Coverage (Check Your Policy)

• Profits - that would have been earned (based on prior months' financial statements)
• Fixed Costs - operating expenses and other costs incurred by owning property (based on historical data)
• Temporary Location - some policies cover the extra expenses of moving to, and operating from, a temporary alternate location
• Commission and Training Costs - businesses often much replace machinery/equipment and retrain personnel on how to use this new machinery
• Civil Authority Ingress/Egress - business interruption may be the result of a government mandated closure of business premises that directly cause financial loss
• Employee Wages - can help a business owner make payroll when they cannot operate to retain quality employees
• Taxes - taxes are still required to be paid, even when disaster strikes
• Loan Payments - help make loan payments even when not generating income

NOTE DURING THESE UNCERTAIN PANDEMIC TIMES: Business Interruption Insurance also applies if government actions cause operations to cease temporarily, if they result in a loss for the business (mandated non-essential store closings, dining room closures even though take out or delivery may still be available) - HOWEVER - policies may not have been written to cover communicable disease 

** NOTE: Insurers are only obligated to pay if the insured actually sustains a loss as a result of interruption.

***** We here at SERVPRO of Benton, Jasper, Newton & Southern Lake Counties are professionals in mitigating your damages and restoring your property after a fire, water, storm, or other disaster. We work closely with your insurance company to provide the best and quickest possible outcome for you. HOWEVER, we are NOT insurance agents or adjusters -- we suggest you contact your insurance agent for more information on Business Interruption Insurance - if you have it, what it covers, is it enough, and if not, if you need it and should consider adding it to your policy.