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Most businesses are familiar with the basic forms of business insurance. Liability insurance, for example, protects you from losses claimed in a business-related accident which causes bodily injury or property damage to someone else.. Most are also familiar with property and casualty insurance that will cover physical property and inventory losses. You may be less familiar with a form of business insurance that can make sure the income of your business is protected in a covered calamity. This is called business interruption insurance and it can be valuable to both newer and established businesses.
Business interruption insurance replaces income lost when businesses can’t be conducted, most frequently, due to a covered loss. Not only can business interruption insurance replace anticipated lost income, it can also provide for covering operating expenses. Beyond average operating expenses, business interruption insurance can also provide for moving expenses to a temporary location, taxes, payroll and even business loan payments. While many businesses that have been victim of a fire, hurricane or tornado may struggle through a rebuild and reopening, those with business interruption insurance have another layer of protection.
There is usually a 48-72 hour waiting period before the benefits of a business interruption policy kicks in, but when it does, many policies provide coverage for the policyholder for up to a year. This is a full year when the business owner can rebuild and restock his business, knowing that his normal business expenses will be covered without having his doors open. The peace of mind alone can be well worth the premium for this valuable coverage.
There has, of course, been much discussion recently on business interruption insurance and issues surrounding COVID-19. Policies that contain “Exclusion of Loss Due to Virus or Bacteria Endorsement” would not provide for such coverage. In addition, there is an on-going debate on whether a virus causes “physical damage” to a business like a natural disaster. Some of these issues will likely be resolved between insurance companies, their insureds and the courts.
Can business interruption insurance be of value to you moving forward? We invite you to contact one of our independent business insurance professionals to discuss your situation. They can explain what is and isn’t included in any coverage and get competitive quotes from multiple resources. You can then decide if this coverage is valuable for you.