75% of businesses that suffer major property damage close within three years. These businesses lacked a contingency plan and/or proper financing to aid in recovery.
So many possibilities exist for a business interruption to occur that it’s hard to imagine not preparing for one of them. Here in Florida, floods abound. Hurricanes and tropical storms shift course on a moment’s notice, offering little time for people to brace for impact. Is your business prepared for such an occurrence? Will a business interruption present a roadblock that permanently damages your organization, or will proper planning reveal a stepping stone that leads to future success?
It’s up to you. To achieve the best, first plan for the worst. Overly optimistic owners who see only rainbows on the horizon neglect to consider alternate scenarios; those with the most foresight imagine potential challenges ahead. Business interruption through causes like a natural disaster can devastate an organization – that is unless the entity is fully prepared. Business interruption insurance offers such protection.
Below, we share information about the benefits of this insurance niche. Learn how such a policy offers numerous benefits for an organization, and picture what would happen if your business suffered a disaster. Would it survive?
What is Business Income Insurance?
Think of it as disability coverage for your business. Business income insurance (also referred to as business interruption insurance) gives an organization time to recover from disaster.
When it comes to managing your property risk, business owners should be concerned not only with a loss to tangible property but also for loss of income. Natural disasters, fires, and other insured perils often result in an interruption of business operations.
Business income insurance is designed to cover your economic damages when you experience a covered loss that results in suspension of business. A suspension of business can mean either a slowdown or a total cessation of business activities. Loss of income is defined in most policies as net profit as well as continuing expenses, including payroll. Extra expenses you incur to recover from a disaster can also be covered.
What is included in a Business Income Insurance policy?
- Compensation for lost income if you are no longer able to operate your business due to a disaster-related damage covered by your current property insurance policy.
- Profits that would have been earned had the disaster not occurred. These numbers are based on previous financial records.
- Operating expenses that must be paid even if the business is temporarily closed. Examples are utilities, rent, etc.
- Expenses from a temporary location for you to resume operations while repairs are being made to your permanent location.
Business interruption insurance is one of the most valuable policies a business can have. Nature is unpredictable and can lead to devastating property damage and subsequent loss of income. Business interruption insurance can mean the difference between business survival and shutdown.
Contact us today to learn more about this business-saving protection.