09.11.06
Insurance for Business Interruptions
As a business owner, you have probably purchased a property and casualty insurance policy to cover your business. However, this policy will not cover your losses should your business operation be disrupted because of a disaster. You need a specific policy to cover that event and it’s known as business interruption insurance.
Business interruption insurance covers profits that are lost and expenses that continue to incur when a business is shut down by a disaster, or even by an event such as an extended power outage. Among the expenses covered by such a policy are salaries, rent and electricity. In short, the types of expenses that still need to be paid even though you are not up and running.
Business interruption insurance is not cheap, but when weighed against the potential damage an interruption in your business can cost you, it may seem like a reasonable expense. By evaluating your needs level and how quickly you would be able to reopen or relocate your business will assist you in determining how much insurance you need.
Also, as with all types of insurance, read the policy thoroughly. Exclusions and provisions limiting what types of interruptions qualify vary from policy to policy. Therefore, it’s imperative to know exactly what you are buying before you cut that check.
