Fires and other unexpected events can disrupt business, as any experienced business owner knows. Not only are you without income, but the longer the interruption lasts, the more it costs to recover. Here are some ways to protect your business from financial loss because of emergencies and interruptions with business interruption insurance.
What Is Business Interruption Insurance?
When a covered event causes the business to be closed, a business interruption insurance policy, such as from a business insurance Newark DE agency, pays for the lost profit. This type of insurance is usually part of a businessowners policy and can reimburse business owners who have closed their business because of damage or loss caused by covered perils like fire, windstorm, vandalism, or theft.
Why Should You Get Business Interruption Insurance?
Business interruption insurance provides coverage for expenses incurred while your company cannot function because of an insured risk. It can cover your rent or mortgage and the income you might have gained if your business was open. This policy can also reimburse you for costs from relocating to a new location temporarily while repairs are made.
What Are Some Considerations Regarding This Insurance?
Your policy will have a coverage limit that is the most it can reimburse after a closure. Purchasing an umbrella policy over your businessowners insurance and commercial auto policy can raise these limits substantially. Business interruption insurance under a businessowners policy may exclude damages such as wear and tear, floods, earthquakes or riots.
It is possible for many small businesses to survive a major disruption with little long-term damage, but sometimes they are not so lucky. Losing access to your inventory could prove disastrous for any small business. Protecting your income by being prepared is the best way to ensure that your business will not face this risk.