Life is full of unexpected surprises. As a business owner, you might dread a surprise that causes you to close temporarily. If you ever have to close your business because of a natural disaster or another interruption, it’s crucial that you get your business running as quickly as possible. Your reputation – not to mention your income – could suffer the longer you stay closed. But there’s business insurance that can help you in the event of a temporary closure – business interruption insurance. Let’s take a closer look at why your business may want to consider it.
What is business interruption insurance?
Business interruption protects your business from closures resulting from things like natural disasters, equipment damage, and vandalism. The goal is to minimize the financial loss to your business if you have to shut down for a time.
What is covered by business interruption insurance?
Business interruption insurance covers many different losses that result from having to close your doors. The specifics depend on your policy, which is why you need to make sure to go over the coverage offered very carefully.
If you’re temporarily closed due to a covered loss, business interruption insurance will provide you with the earnings that you would have made if your business were running normally. Lost revenue due to a forced closure is often devastating to small businesses, many of which never open their doors again after a disaster. Remember, property insurance only covers the cost of the physical things that were lost or damaged (the building and its contents.) It won’t help you out with your lost income. That’s why business interruption insurance an important thing to consider when you’re creating a disaster plan for your business.
Rent or lease:
If you rent or lease your premises, you may wonder how you’ll continue making those payments with no cash coming in while your business is closed. Business interruption insurance would allow you to keep making those payments, even though your business isn’t functional. Just because your business has stopped, doesn’t mean your rent will.
If it’s not possible to use your premises to run your business, you may need to move to a temporary location to keep things rolling. Business interruption insurance may help you with the costs of relocating and your rent and moving costs may also be covered.
Wages of your employees:
Your employees would greatly appreciate being paid during your business’s downtime. Business interruption insurance may help you continue to pay your employees and ensure that they stay with your company.
You can’t avoid paying back loans. Business interruption insurance may help you continue making your loan payments.
How do I get business interruption insurance?
Business interruption insurance can only be added to your property insurance or included with your business owner’s policy (BOP.) You can’t get business interruption insurance on its own. Keep in mind that these policies can be complicated, so you may want to enlist the help of a trusted, qualified insurance advisor to guide you through the process so you can rest assured that you have the insurance you need.
How much business interruption insurance do I need?
You should plan to get enough insurance to cover your business for a good amount of time. You don’t want to run out of insurance when you’re in need.
How much does business interruption insurance cost?
The price of the coverage varies from business to business since no two companies are exactly the same. Some of the factors that influence the cost of business interruption insurance are:
- Your business’s location
- The type of work you do
- How easy it would be for you to work out of a temporary location
Since we don’t know what the future will bring, it’s important to make sure that you plan for a variety of disasters. It’s crucial that you have cash flowing in while your business is closed, and business interruption insurance can help with that. You can secure your business’s future by protecting it with the right business insurance. You might want to consider business interruption insurance to ensure a certain amount of continuity if you ever have to close your business for a short time.
Do you need some quotes for business insurance? We can help you with that. We know that you’d love to save some money on your rates, and we love to help business owners just like you do just that! All you have to do to get started with your quotes is fill out our online form or give us a call today. Our team of agents is here to help.