Buy Business Interruption Insurance

Business interruption insurance is a type of insurance that provides financial protection to businesses in the event of a loss of income due to a covered event, such as a natural disaster, fire, or other unexpected event.

This type of insurance can help to cover expenses and lost revenue that a business may incur as a result of being unable to operate for a period of time. This can include things like rent, employee salaries, and other ongoing expenses.

Business interruption insurance can also cover the cost of relocating the business to a temporary location while repairs are being made.

The average price of a standard Business Interruption Insurance policy for small businesses ranges from $27 to $49 per month based on location, revenues and more.

Business interruption insurance is a form of coverage that replaces business income lost following an event that interrupts the operations of the business, such as fire or a natural disaster.

Business interruption covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.

Some policies also include extended business interruption coverage, which provides indemnity for additional losses that may occur after the property damage is repaired while the business is still regaining its customers.

Generally, the following are typically covered under a business interruption insurance policy:

• Profits. Profits that you would have earned (calculated from prior months' financial statements).
• Fixed Costs. Operating expenses and other costs still being incurred by the property.
• Temporary Location. Some policies cover the extra expenses for moving to, and operating from, a temporary location.
• Commission & Training Cost. Business Interruption (BI) policy essentially covers the cost of providing training to the operators of the machinery replaced by the insurer following the insured events.

Coverage amounts are unique to each business and depend on the amount of revenue a company generates. It's also dependent on risk. Check on how long recovery times are for businesses that have experienced common threats in your area. You should also consider your employees.

If you want to keep them on payroll while your doors are closed, you must include that within your business interruption insurance coverage amount.

Business interruption insurance secures the actual revenue that allows you to pay your employees and support your family. While other types of business insurance protect the people and things you need to bring in revenue (including customers, employees, and equipment), BII protects the revenue itself.

Unfortunately, many policy holders fail to realize the importance of insuring, not just their physical assets, but the income that is generated by those assets. Business interruption insurance can keep capital flowing in the event of disruptions. It can help you:

• Keep your business afloat if a loss forces you to close for a short time.
• Pay for lost net income and continuing expenses such as mortgage, advertising, taxes and salaries.
• Pay your relocation and advertising fees if you set up shop at a temporary site.
• Maintain business continuity.

Business interruption insurance is not sold as a separate policy, but is either added to:

• Commercial Property Insurance - You can add an endorsement or rider to commercial property insurance that will extend the policy's coverage to business interruption losses.
• Business Owners Policy - Intended for small businesses, this type of insurance package policy includes property, liability and business interruption coverage.
• Commercial Package Policy - CPPs are flexible policies that can be customized with a range of options, including business interruption coverage.

Business Interruption Insurance is designed to help businesses recover from financial losses when they experience an unexpected interruption or disruption to their operations. Here are a few examples of situations where a Business Interruption Insurance claim might be filed:

• Natural Disasters: If a business is impacted by a natural disaster such as a hurricane, earthquake, or flood, they may be forced to temporarily close their doors. This can result in a loss of income and ongoing expenses such as payroll, rent, and utilities. Business Interruption Insurance can help cover these costs and help the business get back on its feet.
• Fire Damage: If a business experiences a fire that damages their property and forces them to close temporarily, Business Interruption Insurance can help cover the cost of lost income, ongoing expenses, and repairs to the property.
• Supply Chain Disruptions: If a business relies on a particular supplier or vendor for a critical component of their operations, a disruption in the supply chain could cause significant financial losses. Business Interruption Insurance can help cover the cost of lost income and expenses incurred while the supply chain is being restored.
• Cyberattacks: If a business experiences a cyberattack that causes them to shut down their systems, Business Interruption Insurance can help cover the cost of lost income and expenses associated with the recovery process.
• Legal Disputes: If a business is involved in a lawsuit that prevents them from operating normally, Business Interruption Insurance can help cover the cost of lost income and ongoing expenses such as legal fees.

It's important to note that Business Interruption Insurance policies can vary widely in terms of what they cover and what they exclude. It's important to review the policy carefully and work with an experienced insurance agent or broker to ensure that the policy provides adequate coverage for your business's specific needs.