We talk a lot about insurance coverage plans that will help you pay for repairs should a loss occur, but what about the time it takes for those repairs to happen? Can your business afford to be down for a month, or even the better part of a year?
When a loss causes the slowdown or suspension of your operations, a Business Interruption policy can help you stay in business during the time required to repair or replace your property.
A business interruption policy typically covers you for such things as:
- Profits that would have been earned during your down time, based on your previous financial statements.
- Fixed operating costs still being incurred by the property based on your historical costs.
- Reimbursements for typical expenses that go beyond the fixed costs to allow your business to continue operating during repairs.
Business Interruption coverage is not typically sold as its own policy, and is usually added onto a Commercial Property Insurance or other comprehensive coverage.
What if my business is down because of damage to one of my vendors, would this policy cover me?
Yes, businesses can purchase contingent interruption coverage, which pays when your business is unable to operate because of damage or loss to one of your suppliers, allowing you to operate to the best of your abilities.
Would this policy help me pay to move my operation into a temporary facility while repairs are taking place?
In some cases a policy can cover the extra expenses for moving your operation to, and setting up shop within, a temporary location.
What if the interruption to my business is caused by a forced government closure, would that be covered?
A government-mandated closure of your business can directly cause a loss of revenue that was ultimately out of your control. Examples might include forced business closures due to government-issued curfews or street closures related to an approved community event. This would indeed be a covered event under this type of coverage.