What To Know About Business Interruption Insurance

4/11/2020 (Permalink)

Business interruption insurance can help your company

What To Know About Business Interruption Insurance

As you prepare for an impending storm, you must make sure your fire, wind and flood insurance are up to date. These policies can help you rebuild following a disaster in North Scottsdale, AZ. Yet there is another type of insurance that is just as important.
Business interruption insurance, also called business income insurance, helps support your company financially following an emergency. While regular insurance coverage protects any damaged assets, income insurance protects the business itself. As with traditional insurance, business income insurance covers a variety of perils, including:

• Wind
• Theft
• Fire
• Lightning
• Falling objects

Lost Income

Business interruption insurance can help your company in two ways. The insurer will give you the same amount of money you would have earned had the disaster not occurred. It will determine this amount based on your financial records. The insurance will also cover operating expenses such as electricity —even if your office space temporarily closes after the storm.

Extra Expenses

Business income insurance additionally helps pay for any new expenses you incur to avoid shutting down after the storm. For instance, if you have to rent additional office space so your employees can keep working during the rebuild, insurance may cover this cost.

Length and Cost of Coverage

Your business income insurance typically goes into effect two to three days after the emergency. However, the coverage can last for months and may even support your business for a full year. Make sure that your insurance limit is sufficient to last for that extended period of time.
Typically, the cost of this coverage will vary based on the type of business you have. For instance, restaurants may have to pay more for business income insurance since they are at a higher risk of fire.
Business income insurance can make a post-storm rebuild less painful. As emergency restoration professionals clean up the premises, your company can continue to receive needed funds. You thus should not have to worry about a closed business.