How to Think About Business Interruption Insurance

You expect commercial insurance to help pay for repairs related to business damage. The problem is, though, that many repairs take time. That’s a financial risk as well. What can you do during times of repairs or closure to keep the business on solid ground?

Most businesses carry a form of coverage called business interruption insurance. It can come in handy if a temporary closure poses a threat to your bottom line.
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What’s Business Interruption Coverage?
Accidents could happen in your business at any time. When they do, they might impact your ability to operate. During closure, use business interruption insurance to keep operational and maintain your solvency.

Think of the worst thing that could happen to your operation? Let’s say that one night, a fire ravages the property. It guts your building and destroys the possessions, stock and equipment inside. Your property insurance should help repair or replace some or all your assets.

But, what can you do during the time you must commit to repairs? Rebuilding takes time and effort. Every day lost generally equals money lost in the commercial sphere. With interruption insurance, you’ll be able to meet many normal operational costs. That way, you won’t drag down profits and income trying to recover. After reopening, therefore, you'll find yourself in a more secure place.

What is its Benefit to Your Business?
You might not see an immediate need for business interruption coverage. Still, carrying protection will help you receive more assistance at a critical time.

With coverage, you can continue to pay expenses that still beckon even though you can’t operate. That will therefore help you not deal a blow to your savings before you reopen. You won’t see your hard-earned money dwindle because of an accident you couldn’t prevent. That's the point of insurance.

Business interruption coverage might replace income and supplement costs for:

Profit you might have earned were it not for the accident
Standard utility payments, rent and operating costs
Employee salaries
Machinery replacement and retraining costs

Temporary relocation of the business
Certain extra expenses accrued during repairs

Your policy will often cover a diversity of costs based on your individual needs. Still, it won’t extend to every cost you may encounter following a covered incident. That’s why other BOP options and additional coverage might come in handy. Talk to your agent about how to create a more comprehensive commercial insurance portfolio. They can help you determine what protection best suits your needs.

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