The violent winds of a tornado, the destruction caused by a sudden fire, the devastation of raging flood waters ... all are common hazards that businesses seek protection from by purchasing insurance, since these risks are clearly detrimental to property and the operation of a company.
But what about lost income? While your building is being repaired or the contents replaced, how do you survive without revenue from operations?
That's the reason businesses should plan to protect themselves from unexpected tragedies with Business Interruption Insurance. This type of policy provides coverage that replaces business income lost as a result of an event that interrupts operations, such as a fire, flood, windstorm or other natural disaster.
This insurance is not usually sold as a separate policy, but is added to property or casualty insurance policies or is included in a comprehensive package policy. Although standard property (or liability) insurance doesn’t cover lost income, your coverage can be upgraded to include it.
Small and mid-sized business owners should be especially mindful of these policies because catastrophic events can quickly cause them to go bankrupt. Businesses that use dangerous machinery, chemicals or anything capable of causing a fire should also strongly consider these types of policies.
Twenty-five to thirty percent of businesses that shut down because of a disaster for more than thirty days never reopen. Business Interruption policies can cover:
- Income you would have made if property hadn't been damaged
Bills you have to pay even though you are closed
Costs associated with a temporary location
Expenses incurred to keep the business open after the disaster, like renting equipment
Income deficiencies associated with recovery after you reopen
Don’t let a natural disaster permanently ruin your business. Check with your insurance agent to find out which policy is best for your company. Schwartz Insurance Group would be happy to help review your current situation to ensure your business has the coverage it needs. Contact us at any time.