Business Interruption Insurance

When you work hard to build your business, it’s important to protect your livelihood in case the unexpected happens.

Did you know a significant number of businesses are forced to close after suffering a major loss, like a fire? The good news is, this can be avoided when you have business interruption insurance.

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What is business interruption insurance?

Business interruption insurance is an optional coverage that provides financial support to counter any loss of revenue, if your business needs to close while it’s being restored after a covered peril.

Do I need business interruption coverage?

Ask yourself: Will I be prepared financially if my business sustains a serious loss? Without business interruption insurance, you may have coverage for your building and contents, but what about your lost income? How will you pay your fixed costs such as wages, loans, and taxes? It’s important to get your business back up and running as soon as possible and business interruption will help you with that.

What can business interruption insurance include?

Consider the following scenarios when adding business interruption coverage to your policy:

  • How much time would you need to get your business back up and running to where you were financially before the loss? For example, a 12-month indemnity might not be long enough. Your broker can advise whether an 18- or 24-month term would suit your business better.
  • Do you have a seasonable business where you make the bulk of your revenue in a particular season of the year?
  • Can you afford to lose your employees if you’re closed for several months due to a loss? Payroll can be included in the business interruption coverage. Talk to your broker about the different options to ensure your employees are taken care of to retain your staff.
  • Does your business rely on other businesses to operate? If so, you may need contingent business interruption coverage in the event one of your suppliers has a loss.
  • Extra expense and expediting expense are also important coverages that business interruption can include. Perhaps you need to rent a temporary location or pay employees overtime. You may even have a key piece of machinery that needs to be ordered immediately to get you back up and running.

How do I add business interruption coverage to my policy?

Contact your commercial insurance broker today to learn more and get customized business interruption coverage added to your policy.

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