Running your business includes many variables such as advertising, branding, making appointments with vendors and customers, scheduling employees, and promoting strong work ethics among employees; however, not focusing on the type of insurance your business needs to secure its financial foundation and success can be disastrous. Being unaware of the importance of business interruption coverage may mean the difference between the doors being open or closing down.
What is Business Interruption Coverage?
This type of coverage is one of the most important coverage options available to you as a business owner and should never be overlooked when insuring your business. It is designed to protect your business from loss of income when a covered peril (such as wind or fire) causes damage to your property and results in a temporary shut down or slow down of business operation(s). The following is typically included:
- Net Income- documented income, after taxes, that would have been earned had the covered peril not occurred
- Continued Operating Expenses- expenses incurred during the shutdown or slowdown of business operations
- Payroll (documented)
- Extra Expenses- consult with your local N.C. independent insurance agent to confirm whether this is included. Certain policy exclusions may apply. These expenses include necessary costs associated with the suspension of business, such as rent at another location while repairs/restoration are being made, advertising fees, moving expenses incurred to work at a new location, and the purchase of new equipment necessary to continue business.
Note that this coverage will not kick in until 72 hours (Period of Restoration) after the “direct physical loss” has occurred and ends when the business is repaired/restored (within a reasonable time frame) and operations have restarted at the same location or at a new permanent location.
Don’t Let This Happen to You
Imagine that you own a food catering business and a tornado strikes, causing severe damage to your building, ruining the refrigeration units, and all the equipment/supplies needed to continue your business operation. You know you have your business insured with a N.C. commercial business insurance policy, but when you contact your insurance company you find out you don’t have business interruption or extra expense coverage. Will you be able to afford to pay for the cost of needed supplies to continue at a temporary location, the cost to rent another refrigeration unit(s), the cost to move and pay rent at another temporary location, as well as net income that would have been earned had the tornado not happened?
Make or Break
Whether you have this type of coverage could literally make or break your business, so protect your business with business interruption coverage within a budget that won’t break your bank. It is always recommended you speak with your local N.C. independent insurance agent to review your current commercial policy to ensure you carry this necessary coverage! Paramount Insurance Agency can review your policy limits, exclusions, and conditions to ensure you have the type of business insurance you need before disaster hits.