Business interruption (also know as business damages) damage as well as property damage claims insurance can help protect your business financial if you are forced to close due to an unexpected problem (such as a hurricane or tornado covered by your policy. Even if you are the most organized person to ever exist there can be circumstances out of your control that could cause financial depression to your life.
What if a car comes through the front of your business and you must close for a couple weeks for repairs? How would you replace your loss income? This is way best small business insurance plans include these types of situations. You may be wondering “How do I get this amazing insurance?”, well I am going to tell you!
What Is Business Interruption Insurance?
Business interruption insurance helps replace loss income due to damages. If you are unable to open because of a reason listed on your policy, then you can be compensated. This coverage type is called business income coverage which is typically included in your business owner policy (BOP).
What Does it Cover?
Business interruption insurance covers any operating expense due to a problem covered by your policy. The covered perils of a business interruption insurance are theft, wind, fire, lightning, and falling objects. Covered operating expenses may include:
- Revenue you could of made if you were open
- Mortgage or rent payments due
- Loan payments for the business
- Taxes
- Payroll
- Relocation
- Training costs for employees to learn about new equipment.
What Does It NOT Cover?
Here are some of the exclusions from the business interruption insurance policy:
- Damage from a flood or earthquake
- Any undocumented income not listed on financial records
- Utilities, they are usually shut off when a business is under repair
- Closure caused by communicable diseases
- Damaged property, which is covered by commercial property insurance
Who Needs Business Interruption Insurance?
Business interruption insurance is a good idea for anyone that owns a business. It can be a necessity to businesses that have a physical location or assets that could be affected by problems mentioned previously. Places they recommend getting business interruption insurance are:
- Restaurants
- Retail stores
- Salons/ spas
- Dog groomers
- Yoga studios
How Much Coverage Do You Need?
Every business interruption policy has a coverage limit. This is the max amount the insurance company will pay toward a claim. Choosing the right coverage amount for you is crucial so you do not have any additional fees. Take into consideration the following scenarios when picking a business interruption policy:
- How much time would your business be closed if a fire were to start?
- Are your security and fire alarms updated?
- What is the price to rent new office space if needed?
Looking at overall gross earnings and projections can help you prepare for coverage you need. You want insurance to be able to cover everything in full leaving you with no stress.
What Will This Cost You?
Business interruption insurance price is based on factors such as what is your industry, how many employees you have, and the amount of coverage you choose. Costs can also change depending on your location and risk. The cost can be anywhere from $40 and $130 a month or $480 to $1560 a year.
Should I Buy Business Interruption Insurance as Part of a Business Owner’s Policy?
This policy plan is great for small business owners because it is affordable. You can get a bundle policy that would include general liability insurance, commercial property insurance and business interruption insurance into one policy.
General liability insurance protects against claims made to you including bodily injury, property damage, advertising injury, copyright infringement and reputational harm.
Commercial property insurance protects assets of a business including furniture, computers
