How well would your business fare if you lost revenue for a week, or two weeks, or even a month or longer? This situation is more common than you might realize when disaster strikes, even for seemingly small disasters.
Let’s say you have a retail store. The location is fantastic, right at a well-traveled intersection where high visibility provides built-in advertising. One sunny afternoon, you hear screeching tires and then the crash as glass and display racks go flying. Now there’s a car in your showroom, leaking fluids. Fortunately, no one is hurt but it will take a while to clean up the mess. Not only do you have to repair or replace everything that was damaged, but it’s likely that you’ll be waiting on construction permits and structural engineers to be sure the building is safe. You’re out of business for a while.
This is a dramatic example, but business interruptions can happen from a number of covered claims, like a lightning strike, a fire, storm damage, and more. Business interruption insurance can protect your business in these situations by reimbursing your business for the income you would have received if it were business as usual.
Much like other types of insurance, you’ll often be able to choose between named peril and all risk coverage, with the latter providing more complete coverage. Your policy may also protect you against related expenses, like operating out of a temporary location.
Discuss your coverage needs with your broker. Some business owners choose limited business interruption insurance while others opt for extended business interruption insurance. Extended coverage provides more complete protection because the coverage doesn’t end when the repairs are complete. Chances are good that the mishap cost your business money in the form of ongoing slowed sales. Just like it took some time to rebuild your business location, it may take some time to rebuild your business to its full performance.
Business interruption insurance is usually sold as an add-on to your business property insurance policy. The two coverage types work together to protect your business in ways that one type of coverage alone can’t. In both cases, the coverage protects both your business and your savings. Just reach out to your broker to learn more.