When you have committed to running your own business, you’re responsible for your own financial health in many more ways than an employee. If your business does have employees, you as the owner will likely be responsible for other workers’ financial health if a variety of events were to ever happen during operation. Due to this responsibility, it is imperative to choose the right kind of insurance to protect your business.
Must-Have Coverage for Business Owners
From a bustling restaurant to a busy accounting practice, it’s crucial to make sure that you have business interruption insurance. Also known as contingent business interruption insurance or business income insurance, it will provide protection if your company can’t stay open due to the events of a covered loss. Fire is covered, with a payout for equipment and damaged structure being the motive for obtaining it. Since you can’t have your doors open while rebuilding, it is impossible to earn income during that interval.
This type of coverage assists with losses that result from the interruption of normal operations. Here are some of the incidents that are thankfully covered:
- The income you lose if you are forced to close.
- Employee payroll for those not able to work if your business is temporarily shut down.
- Lease and mortgage payments that can’t be paid due to interrupted income.
- Building restoration if you must change locations entirely.
- Costs to re-train employees on regulatory procedures if operations are suspended or interrupted.
The Crystal Ball’s Absence: The Need for Business Interruption Insurance
Some months provide more natural disasters than others. There are plenty of AI entities that are working hard on predicting the future, but for now, it is complicated to know if a game-changing event is on the horizon. It is hard work building a successful business from scratch, and even harder to get through challenges such as natural disasters once they occur.
If a tree falls on your roof, insurance will cover your lost income while you are undergoing vital restoration. You will also be covered for a government-mandated road closure or other civil authority element that will temporarily shut down your company. The restoration period of interruption coverage is the length of time that the ability to generate income is lost. There is usually a 48 to 72-hour waiting period before your policy kicks in to handle the income coverage.
How Much Does Business Interruption Insurance Cost?
Here are some of the deciding factors that influence how much your coverage will cost:
- What type of industry you serve
- How many employees you have
- The amount of desired coverage
Costs can vary depending on what city you are in, and the various risks of covered loss or sudden peril. If you live in an area that is prone to wildfires, the cost for this type of coverage can increase. Areas prone to natural disasters such as hurricanes will see you paying much more than predominantly landlocked states such as Missouri.
Items Excluded From Business Interruption Insurance:
Here are some of the things that this type of coverage won’t assist with:
- Broken items impacted during the covered incident.
- Flood or earthquake damage, which requires a separate policy.
- Undocumented income that is not listed on your official record of finances
- Utilities, since they are frequently not on after a covered event occurs.
- Communicable diseases that could disrupt daily operations.
If the unexpected occurs, you can rely on us at Alexander Insurance to assure that you have what you need to operate!