Business Interruption Insurance

In the event that a business is damaged by weather, theft, or any other cause, the consequences can be widespread. Not only can there be costly repairs but in some instances the business may not be able to continue, at least temporarily.

While revenue may come to a hault, other expenses will continue, this is why it is important to have business interruption insurance. In most cases a property insurance policy will cover the basics such as cost to repair the building or replace equipment, but not the financial effects. Having this coverage can be a huge weight off your shoulders.

The three primary elements of a business interruption policy include; business income, extra expense, and rental value.

Business Income – This is defined as the net income that the owner would have earned had normal business operation continued. The amount of insurance rewarded will be determined by past financial records.

Rental Value – This is very similar to business income insurance coverage for rental property owners. This type of insurance provides coverage for the rental income that the property owner would have received from tenants during normal operations.

Extra Expense Coverage – This business insurance coverage reimburses the business owner for extra expense paid because of a storm. This allows the business owner to continue operations at the new location and to be covered for the additional expenses that are associated with it.

Having a cash flow that can continue through the claim process is a wight off your shoulders and an important coverage to consider.