If you are a business personality, then you know what it means to have business insurance. A disaster such as fire always comes at the least expected time. You can lower the effects of such catastrophic events by including business interruption to your business insurance coverage to protect your business from loss of income arising as a result of these hazards.
What is business interruption insurance?
Well, the name speaks it all. This type of insurance covers for loss of income which may occur as a result of business interruptions due to a disaster like a fire. In such occasion, your business running may be interrupted as you will be forced to stop working due to damaged equipment or other reason. During this period, you will have lost income.
Does it matter that I have one?
An insurance cover is essential for every business because it protects businesses against unforeseen or unpredictable circumstances that strike without notice. Business interruption insurance reduces your worry about additional expenses triggered by interruptions. Therefore this type of insurance is very crucial, and every business owner should consider purchasing one. And yes, it matters that you have one.
What to consider when buying business interruption insurance
Loss of revenue can result in complete loss closure of business especially if it is a startup. Just like other business owners, you too value the need to make sure the industry will continue to exist during the period of shut down and even afterward. Business costs like lease payments, salaries for staff retained during this period, loans, and utilities are some of the expenses that require to be taken care of even as repairs for the property are going on. It has been confirmed that businesses that do not have this type of insurance have a hard time restoring their business to their early state in the event of a catastrophic incident.
The business interruption policy can protect much more than just loss of income. It can cover the following as well:
- Supplementary costs incurred to restore the business to its earlier state
- Claims preparation costs for example auditors and accountants fees
- Prevention or impediment of access to your premises caused by an insured event,
- Interruption caused by a failure of supply from a public authority resulting from a covered event, or even a murder at your property
Business interruption insurance may also cover your losses after any of the following:
- Damage to possessions used by you at your site caused by an insured incident for example the landlord’s structure, a sub-station on your location owned by a power or telecommunication company
- Damage to a client’s area triggered by a covered risk
- Loss to a supplier’s property caused by an insured threat
Insurance costs for this type of coverage depend on the risk elements involved. However, it is averagely affordable and can safeguard your business.
While you think of whether or not to include Business Interruption Insurance to your commercial insurance coverage, it is crucial to keep in mind that it is necessary. Just a short closure is enough to wipe away your business without a trace.