Being a business owner requires exploring the many ways you can safeguard your assets. This includes the physical location and what’s inside. Business interruption insurance is designed to protect businesses during an emergency that leads to then closing or being displaced.

Homeowners and car insurance policies have add-on benefits to deal with the loss of use. A homeowner’s policy will pay for temporary lodging and a car policy will get you into a rental.

Coverage is not always automatic. When taking out a Business Owners Policy, verify there is a clause for it and that you understand how it works.

Have you ever considered what you would do if your business was destroyed due to no fault of your own? Keep reading to learn more about the benefits of having business income valuations and interruption coverage.

More On the Benefits of Business Interruption Insurance

Insurance policies have different riders and clauses for different scenarios. If someone crashes through the plate glass window in your business, the damage caused would be covered by your property insurance.

In some cases the damage is significant and you have to temporarily close while the damage is being repaired. You would file a claim for business interruption.

It is important to know that an occurrence not covered under your property insurance, will not be covered under the business interruption insurance. A good example is, damage caused by flooding.

What Does it Cover?

There are three things that your business interruption insurance will cover. They include:

1. Business Income Coverage

This is the earnings that your business loses because you are non-operational. You will have to justify your average earnings through loss profit statements, receipts, and tax returns.

2. Operational Expenses

Certain expenses don’t stop just because of your business being temporarily shut down. Things like rent/mortgage, equipment loans, and utilities, still have to be paid. In addition, if want to keep your staff, you’ll want to ensure they continue to receive their salaries.

To add on to that, any benefits like health insurance and retirement plans still have to be covered.

3. Relocation Expenses

In some instances damage is due to a natural disaster, i.e. a hurricane or tornado, and your business is destroyed. Your business may have to temporarily relocate until it is rebuilt or a new permanent location is secured.

Your business interruption insurance covers the relocation period.

When Does it Go Into Effect

Coverage typically goes into effect 72 hours after you experience a loss. Even then the process to get compensated could be a lengthy process because you have to document your loss and work with an adjuster.

Is Your Business Protected?

Business interruption insurance can give you peace of mind when your business is significantly impacted due to no fault of your own. If you are in a geographical location that is more susceptible to national disasters, it is worth the investment.

Are you a business owner located in south Florida and want to learn more? Click here to request a consultation.

Jose Tavares

Author Jose Tavares

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