Business interruption insurance policies can give peace of mind to all business owners. The business insurance will protect against lost profits and earnings as well as business expenses in the event of any disaster that leads to the closing of the business. Without sufficient protection a business is at risk of not being able to ever reopen.
A property insurance policy may cover the building repairs but it will most likely be unable to help with any lost earnings or business expenses during the repair period. This leaves the responsibility of keeping the business going up to you and this will have to be done without the ability to earn any profits or earnings from the business. Most companies will fold under this type of pressure.
You will not be able to purchase business interruption insurance as a standalone policy, it is added on to an existing property insurance policy or business owners package. You can ask your agent to show you what plans are available for you and your business.
The policy you choose can be customized for your needs offering many different plan options. You can find extra business insurance coverage for longer coverage times as well more coverage amounts. More coverage time options should be considered due to the many reasons delay on repairs can be caused by. You should also be aware that the policy may not be in effect right away, generally 48 hours are needed before the policy starts.
As with any insurance policy the business interruption insurance will be priced according to risk factor as well as options you choose. The location of your business as well as what type of business it is and the ease of being able to be relocated during a forced closing is considered in the total overall cost of the policy.
If your business can easily be relocated while repairs are being made you can expect a lower priced policy. The insurance coverage will cover the cost of finding a remote place to operate from and therefore save in the expenses they will have to reimburse you.
Business interruption insurance covers lost profits and earnings for the business during the times it is not producing due to a forced closure. Your company financial records are used to determine the amount of profits or earnings you would have expected to make. Business records should always be maintained properly and be up to date, this is extremely important in the event of a disaster.
Water and electricity can be considered continuing expenses and may be covered by the insurance while the doors are closed if they are needed to assist in repairing the building. You should not expect the lease payment to be made if you are collecting profits and earnings from the insurance company. You can expect to have the cost of relocation covered from the policy so that business can resume.
There are several options for coverage amounts as well as time for coverage. You should not only ask your current agent but shop around for comparisons on cost and coverage amounts and terms.
Recent Comments