Business interruption insurance provides small business owners with a semblance of business as usual in the event of a disaster. Business contents insurance coverage is usually part of the Business Owner’s Policy (BOP) or a commercial property policy or is available as a stand-alone insurance policy. Business interruption helps small business owners when a loss interrupts business and impacts the company’s ability to continue to make money. Business interruption and business contents insurance can help companies earn customers’ respect for doing business after a loss- and their goodwill.
Coverages Provided by Business Interruption Insurance
Business interruption insurance includes coverage for operating expenses, lost income and additional expenses. Covered perils in the business interruption policy include windstorm, fire, lightning, theft and vandalism, aircraft, vehicles and losses due to civil commotion (coverage varies by location and insurance company). Business interruption includes coverage for loss of income, contingent expenses (for losses that occur at a supplier’s location), expenses related to business restoration after a loss and loss of income and expenses if renting or leasing property and cannot return to the location to do business.
How Business Interruption Insurance Claims Are Paid
The business interruption insurance policy provides small business owners with claims payouts that are unique to running a business. Business contents insurance policy claim payments are based on the amount of income generated before a loss. The small business owners’ insurance policy will base business interruption claims on historical sales data. The old sales data used in a claim may be subject to an increase, depending upon the situation.
Not Every Small Business Owners Policy Includes Business Interruption
Not every small business owners’ insurance policy provides business interruption coverage. In addition, most BOPs exclude flood. If a company purchases a stand-alone flood policy, it’s important to talk with the insurance company to ensure business interruption is included.
Before Buying a Business Interruption Insurance Policy
When buying business interruption insurance, it’s important to ensure that the business has proper coverage in the policy. Salaries, rents and costs for maintaining a property (i.e., utilities) should be part of the business owners’ insurance policy. A dip in profits that occur as a direct result of a loss should also be covered. Shop online before buying a business interruption insurance policy to compare coverages, costs and deductibles.
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