As a business owner, you must be ready for any kind of contingencies that might halt your business. Having the right insurance makes it easier to face such situations. One of the most sought-after insurance for business owners is business interruption insurance.
It provides coverage against the income lost due to the halting of the business by a natural disaster or other mishaps. This type of insurance is usually sold as an add-on or a rider on property or casualty policies. Under this insurance, the insurer is only liable to pay for damages for the listed damages. Let’s look into its coverage and exclusions.
The Insurance covers all profits the business would have made if the loss had not occurred.
The coverage includes the fixed costs that are incurred while running the business.
If you find a temporary location to operate your business, the insurance covers the relocation costs and also the operating costs of the temporary location.
A fire or a natural disaster causes damage to the machinery. The company will then need to train its workers on how to handle the new machinery. The insurance covers the cost of training.
A government-mandated curfew or road closure near the business premises may directly affect your business as your workforce may not be able to reach the company. The insurance also provides coverage for such losses.
It might be difficult for a business owner to pay his employees when the business is shut. A business interruption insurance helps the owner to make payments and retain current employees.
Even if the business undergoes loss, the company still has to pay taxes. The insurance covers all the tax costs of the company and saves it from penalties.
A business interruption insurance covers the loan payments of the business in case of a loss.
It can be hard to figure out how much coverage to opt for under this insurance. Here are some questions you can ask yourself to determine the coverage needed.
You can also make a rough estimate of your gross earnings and projections to estimate future profits. This will help you figure out how much coverage you want.
Business interruption insurance is great to safeguard your business from disasters. It is advisable to compare the terms and conditions of various policies and only then choose the one that suits your and your business’s needs the best.
Are you looking for a new insurance policy or a policy renewal? Reach out to us and let us assist you.