Why do I need business interruption Insurance?
Your business is your livelihood, and your ability to generate income can be at risk more than you may think. From a flood that damages your property to a fire that harms your computer system and client information, your business could come to a halt quickly. For a small or medium sized business it may become very difficult to recover from a loss. Even a small loss can cause your business to be closed for weeks which causes a loss in income and possibly clientele. Business interruption coverage can help you and your business weather through the time it takes to repair or rebuild your business.
What does business interruption insurance cover?
Lost Net Income
If your business experiences a loss that leads to downtime where your business is not operational, your income stream will dry up immediately. It’s one thing for your commercial property insurance to kick in and get your repairs going but what happens in the meantime while you are unable to earn income from your location? Business interruption provides coverage to provide for the income that your business would have earned during a closure period due to a covered loss.
Expenses & Payments
Imagine your business is damaged or destroyed. Your income stops immediately but your expenses keep marching on. With not being able to continue your day-to-day operations and pull in income, those bills are going to add up quickly. Rent, hydro, electricity and payments for other utilities will continue.
Does business interruption insurance cover payroll?
And what about your people? Can you still meet payroll if there is no income coming through the door? Business interruption coverage helps you continue making payments even if you are not completely operational.
How does business interruption insurance work if I have to move to a new location?
What happens if the location of your business becomes unusable? Your business interruption coverage may help cover moving costs to a temporary location and may include coverage for your rent. You might even find you can never go back to that same location. Business interruption insurance will help bridge the gap while you get established in a new location.
What is contingent business interruption insurance?
Business interruption insurance will also come into play if your main supplier suffers an insured loss and you are unable to continue your operations. As well, what if your favourite and very key customer suffers a loss which means they are not requiring you to supply them until they are back up and running? This coverage can help here too. This is called contingent business interruption as the loss hasn’t happened to your business but the loss of a key supplier or customer impacts your ability to run business as usual. Even if an anchor location suffers a loss that affects the usual customer traffic to your store, business interruption insurance can help until all is back to normal in your ‘hood.
Whatever it is that you do, ensure that a loss doesn’t stop you from doing what you love. Talk with your MIG broker today about business interruption coverage to provide peace of mind for your business and its stakeholders.