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Article originally posted on www.insuranceneighbor.com(opens in new tab)
Business interruption insurance is a specialized form of protection for business owners. In the event that your business is shuttered due to sustaining damage from fire or a natural disaster, this type of insurance could save you from suffering a financial disaster. Depending on the policy, the cost associated with moving to another location, payroll, taxes, loan payments and operating costs can be paid through the policy, keeping your business alive. The top 4 top reasons to consider business interruption insurance are:
1. Heavy storms in your area are becoming more common.
Wind, snow, and ice can seriously damage a business facility. To determine the best business interruption policy, read the “named perils,” which typically include fire, wind damage, falling objects, lightning, and theft. Some perils are excluded, typically including earthquakes, floods, infestations, or pandemics, and others. Every policy is different, and our local agent can help you choose the policy that best suits your business and location.
2. Your business would not survive if shuttered for a month or more.
If your facility has been seriously damaged, to the point where you cannot produce your product or service, your rainy day fund could be depleted within a few weeks. The costs associated with paying employees, taxes, and keeping all leases current adds up fast, and business interruption insurance can help you keep your most valued employees, move to another facility, and keep your payments current, for a specific period of time – and help your business continue to operate.
3. Your business relies on digital information to operate.
Few businesses exist that operate on a cash basis. If your business relies on digital devices to store customer or client data, process payments, and communicate internally and externally, a cyber incursion can be a serious setback. The risk of a privacy or security breach has never been higher, and when it happens, the entire operation comes to a halt, unable to function normally until the issues are resolved. An evaluation of your business operation will determine what type of policy to put in place, and the limits that make the best sense. This insurance will reduce the impact on your day-to-day operations after a cyberattack.
4. When a shutdown happens, business interruption insurance softens the blow.
If your business must shut down due to a natural disaster or other covered peril, rather than facing extensive financial losses, the basics are covered to continue to operate, or make the transition to another facility. Your business will be able to recover the amount of income you would have earned during a closure, pay your employees, pay for the cost to relocate, and make timely payments on loans or leases. While the challenges you face are stressful and difficult, this insurance will definitely make the transition easier, and far less expensive.
What is the best type of business interruption insurance?
Every business interruption insurance policy is slightly different. Choosing the best policy will require looking over your monthly payroll, lease or rent payments, and estimate the costs associated with moving to another facility. These policies have a time limit, which can range from a month to a year. Speak with one of our local agents for assistance in choosing the best policy at the most affordable rate.Filed Under: Business Insurance | Tagged With: Business Insurance