While all business owners want their enterprises to be both productive and profitable, you may not have considered the costs associated with a business interruption. Your business interruption coverage can be added to your property insurance and this form of insurance is critical in keeping your business fully protected. It is impossible to predict every eventuality, particularly the damage incurred when a heavy storm or other disaster damages your property. This insurance keeps your enterprise viable during the period that you are forced to vacate. You can continue to provide your employees with pay, and manage bills during the period in which the business cannot operate.
But how is this different from standard property insurance? While your property insurance will help to pay for restoring your business after the interruption, it doesn’t always cover the losses associated with the inability to function for a period of time must be covered as well. Many business owners choose to add business interruption insurance to their property insurance to protect against this eventuality.
Business interruption insurance (or business income insurance) is triggered under the following circumstances:
- Physical damage to the property is so extensive that operations are suspended.
- Damage to the property is so severe that customers or clients are unable to gain access.
- A government shutdown of the area prevents customers from gaining access to the property.
Halting Operations Can Bring Significant Financial Losses
When any business is forced to halt operations due to a disaster, clients and customers can be lost to the competition and repairs can take an extended period of time. Policy limits will vary based upon need and the type of business will determine the cost of adding business interruption insurance to your property insurance policy. Generally, if you have equipment that poses a risk of fire this factor will also affect the cost of added insurance protection. There may be other options beyond business interruption insurance – such as added expense insurance – that could be adequate for your needs. But the only way to determine what is best for your business is to speak with a local agent.
Contact one of our insurance agents at Pen-Ex to discuss adding business interruption insurance to your commercial property insurance policy. We search out the best programs for our local customers, with the highest level of protection at the lowest possible rates. Call today for more information.