Business interruption insurance helps bring you peace of mind if you have to shut down.
When faced with shutting down, there are a lot of “what ifs.” Business interruption insurance helps protect your business.
What is business interruption insurance?
Business interruption insurance, often referred to as business income interruption insurance, serves as a safeguard for your enterprise when it is compelled to cease operations due to a covered loss. During the designated restoration period, which encompasses the time required for repairs to be completed, this type of insurance can assist in covering the ongoing operational expenses of your business, including:
- Loan payments that are due during the shutdown.
- Mortgage, rent, and lease payments.
- Payroll for your employees.
- Taxes, whether you pay them quarterly or monthly.
- The revenue you’d make if your business was open.
Coverage for when you rely on other businesses.
There are instances when it is not your own business that ceases operations, but rather the businesses upon which you depend for your own success. Contingent business interruption insurance, often referred to as dependent properties coverage, safeguards your enterprise in the event that a covered incident damages property not owned by you, leading to a decrease or loss of income. This type of insurance can extend to various entities, including customers, suppliers, service providers, and even transportation services. For instance, if a fire were to occur at a supplier's facility, hindering the delivery of essential materials, your contingent business interruption insurance could reimburse you for the financial impact of that disruption, including any loss of income.
When you need more than just your day-to-day expenses.
Imagine a scenario where a pipe has burst in your office, rendering it unfit for work. In such a case, you would still need to find an alternative location to continue your operations. Who would be responsible for the additional costs associated with this temporary relocation? By incorporating extra expense insurance into your business interruption policy, you may be able to offset expenses that exceed your usual operational costs. This coverage can extend not only to the costs of relocating to a temporary workspace but also to expenses related to hiring additional personnel, compensating your existing staff for overtime, and providing training on new equipment. It is prudent to consider this type of coverage to safeguard against unforeseen emergencies.
What if a governmental body shuts you down?
Civil authority coverage represents a distinct component of your business interruption insurance policy. This coverage comes into effect when your business is compelled to cease operations due to directives from civil authorities, which may include local, regional, or federal government entities. It is essential to note that this coverage has particular stipulations and is applicable solely when the shutdown is connected to physical damage occurring in a nearby building that is not owned by your business. Furthermore, such plans generally offer coverage for a maximum duration of two consecutive weeks. Therefore, it is crucial to understand the details of this coverage as an integral part of your business interruption insurance.
Your business may be fine, but you’re not getting utilities.
There are occasions when a business must cease operations not due to physical harm to its premises, but rather due to a lack of essential utilities required for functioning. For instance, the absence of electricity can hinder your ability to conduct business activities. Including utility services coverage in your business interruption insurance can offer financial protection in the event of a shutdown resulting from the loss of utilities such as gas, water, and electricity supplied by both public and private entities. Depending on your specific policy, this coverage may extend for a predetermined duration or until the utilities are restored. In certain cases, it may also cover direct damages incurred by your business as a result of a utility interruption. Are you considering business interruption insurance for your enterprise? Please contact us to explore your available options.
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Summerville, SC Office
870 College Park Road
Summerville, SC 29486
Orangeburg, SC Office
1628 Saint Matthews Road
Orangeburg, SC 29118
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