Understanding Business Interruption Insurance

3/24/2021 (Permalink)

Having a business interruption policy will make your rebuild less stressful.

When you own a business in Santa Fe Springs, CA, you have a lot to consider in protecting the life of your business. You probably have several insurance policies insuring you and your commercial building are protecting in the event of an accident, but are you protected in the case that you experience a major disaster and have to rebuild your business?
Many business owners don't consider what would happen if they experienced a business interruption for any period of time. This is why you need to understand business interruption insurance.

What Does Business Interruption Insurance Cover?

Individual policies will vary, so be sure you understand your coverage. Ultimately, your policy limits are decided by you. You at least want to be sure your limits can cover you for up to 30 days, which is standard. If there is significant damage, cleanup and restoration could take time.
While your closed business is in the process of rebuild, the coverage should help you with the following:

• Employee payroll
  
• Replace lost income based on your records
  
• Business loans
  
• Mortgage
  
• Tax payments
  
  

What Does Business Interruption Service Not Cover?
There will be some things that your business interruption policy doesn't cover, but the good news is most of those items will be covered by your commercial real estate policy.
The items business interruption insurance won't cover include:

• Flood, storm or earthquake damage
  
• Utilities, which you should be able to cover with your replaced lost income
  
• Pandemics
  
• Damage to your building and the items inside it
  
  

Your business interruption policy is customizable and there are many add-ons that can be purchased, including extra expense insurance and coverage and civil authority insurance.
The cost of your policy will be contingent on many factors, including your location and the risks associated with that location. Talk to your agent to find out what the right amount of coverage is for you. Having a business interruption policy will make your rebuild less stressful.