Does My Small Business Need Business Interruption Insurance?

Small Business Interruption Insurance

The world is an unpredictable place; we never know what’s around the corner.  That’s why it’s not only important to have a Small Business Insurance package but a comprehensive one that includes Business Interruption Insurance.

 What is Business Interruption Insurance?

Business Interruption Insurance covers profits that your business otherwise would have made in the event of a natural disaster or fire that forces your business to shut down for a period of time.  Depending on the policy you choose, Business Interruption Insurance may also cover fixed expenses, relocation costs, training costs for new employees and circumstantial closure of business (if enforcement is government-related).

Business Interruption Insurance

Why Business Interruption Insurance?

 We all know the importance of insuring physical things, such as your building and inventory in case some kind of disaster strikes, but the losses don’t end there.  Property Insurance covers these physical things but doesn’t help with the other costs that come with it, such as loss of income or rent.  While your property is being restored, your employees’ wages still need to be paid and bills continue to pile up.  You may have the ability to move your business to a temporary location to continue to function, but without Business Interruption Insurance to help you pay for it, this may not be an option.

Furthermore, if your business relies on a supplier for your product, what happens if there is a fire at their location?  Business Interruption Insurance would cover you for expenses associated with this loss that will keep your business going while you locate a new supplier.

The following Infographic from CGU explains why Business Interruption Insurance is so important:

Business Interruption Insurance Infographic

Some of the most common claims for Business Interruption Insurance are:

  • Burglary and theft
  • Fire
  • Storms (hail, lightning strikes, flooding)
  • Burst pipes
  • Glass breakage
  • Accidental or malicious property damage

Most Business Interruption Insurance

What is covered under Business Interruption Insurance?

Business Interruption Insurance is geared toward getting your business running again, and although there are many considerations, it typically covers:

  • Revenue. Any income that your business would have earned during the period that your business had to close would be covered.
  • Employee wages. Employees will still need to be paid if you have to shut down.  Business Interruption Insurance covers payroll while you’re shut down.
  • Rent or lease. Even if you’re unable to use your business space, your rent will likely still need to be paid.
  • Relocation. If you are able to move your company to a temporary location to continue operations, your moving and rental costs may be covered.
  • Taxes. There’s no forgiveness for taxes. You’ll still have to pay them while you’re closed.
  • Loan payments. If you have loans for your business, they’ll also still have to be paid.

  Business Interruption Insurance Covers

While you can’t control natural disasters or unforeseen circumstances, you can safeguard against them to ensure your business doesn’t become a statistic.  The right coverage will keep your business going even when production stops.

Call us today and find out how Business Interruption Insurance can help your business.