How Business Interruption Coverage Can Save Your Business

When an accident renders your business facility unusable, what can you do? To keep the business running, you’ll need to relocate to a temporary facility while the damage is repaired. But Property Insurance alone doesn’t cover any of the costs involved with relocation or the lost income. Let’s explore how adding Business Interruption Coverage to your Property Insurance policy can help your business survive a disaster.

What’s Included?

  • Compensation. When your business loses income as a result of having to temporarily relocate due to damage covered by your property insurance.
  • Profits. If the disaster had not occurred, what would your earnings be? Your financial records are used to calculate your projected lost profits.
  • Operating Expenses – Permanent Location. Even if your business has temporarily closed, you still face operating expenses (utility bills, etc) that must be paid on your original premises.
  • Operating Expenses – Temporary Location. While repairs are being completed at your permanent location, you will face new operating costs at your temporary location.

 

Considerations

  • Business Interruption Insurance must be added to your Property Insurance policy or included in your Business Owner’s Insurance. It cannot be purchased on its own.
  • The policy limits should be able to cover the amount of time it would take to repair or rebuild your permanent space. This can range from days to months, depending on your facility and the damage.
  • Risk is a major factor in determining the cost of your coverage. The nature of your business, business location, etc are are evaluated when your coverage is calculated.

 

Business Interruption Insurance is one of the most valuable types of coverage available to business owners, yet it is often overlooked! 

Call ERM Insurance Brokers in Irvine, California to learn about our business continuity resources. (949) 222-0444

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