As a business owner, you know the value of keeping your business operational. But the world is not under your control, and sometimes unexpected events occur. You could not have protected your building from that fire or prevented that flood.
When things like this happen, it pays to have the right type and amount of business insurance in place to help you. In fact, having the right coverage can help you minimize the financial losses from the incident but also from being closed during repairs. That's where business income insurance comes into play.
What is Business Interruption or Income Insurance?
Business interruption insurance, or business income insurance, provides financial compensation when you cannot operate your business because a covered incident has occurred. You may have business insurance that covers the repairs needed on the building. However, the longer you are out of business and unable to operate, the more expensive it gets. This coverage can step in and provide some of the income that you would have received if your company was open.
Who Needs Business Interruption Coverage?
Business interruption coverage applies to any business that could be closed for a significant length of time. This includes most types of businesses that operate out of a building. This may be due to instances such as:
- Hail damage
- Windstorm damage
- Equipment damage
It applies to most other types of claims as well. How much coverage you have depends on the amount of sales you generally have. Consider a significant fire. If your business was unable to operate for two weeks or two months, that loss of income would be financially difficult to overcome. You want to ensure your policy is large enough to meet your needs for an extended amount of time.
Every type of business is different. Getting a customized insurance plan in place that fits your company's unique needs is essential. You will need it to be customized to meet your unique business size, risks and type of company. All of these factors combined determine just how much coverage you need. Getting a quote for business insurance may include interruption coverage, but don't assume you have it. Verify this information with your insurer first.