What is business interruption insurance?
Business interruption insurance is a type of commercial insurance designed to cover a portion of a business’s lost revenue if it is forced to shut its doors temporarily. In addition to paying a portion of this lost capital, business interruption insurance also offers businesses financial support to pay for the recurring expenses that they are responsible for. For instance, this type of insurance can help you cover your business’s rent, utility bills, and employee paychecks. As every business faces risks, having this coverage is essential for ensuring your company’s continued success. Here’s what you need to know about business interruption insurance.
- When Does This Insurance Kick In?
Business interruption insurance coverage kicks in whenever a covered peril causes damage to your business’s physical building or the supplies and equipment that is necessary to complete normal operations. Common business interruption situations include fire, flood, vandalism, theft, extreme weather events, and so on.
- Is This Coverage Mandatory?
While business interruption insurance is highly recommended, it is not legally required. However, keep in mind that failing to secure this protection could leave your business vulnerable. If you do not have enough money saved to cover the cost of a business interruption, then a temporary closure could become a permanent one. Securing the right business interruption insurance ensures that this scenario does not become a reality for your company.
- How Much Does This Insurance Cost?
The cost of business interruption insurance will depend on the nature and location of your business. For instance, if your business often works with fire or dangerous substances, then this increases your business’s risk for damage. Because your risk for business interruption is higher, you would have higher insurance costs. Similarly, if your business is located in an area that experiences major storms or high fire risk, then your insurance rates will also be on the higher end.
This is what you need to know about business interruption insurance. Are you interested in protecting your company with the right commercial coverage? If so, then contact the experts at Robert J. Los Insurance Agency in Hamburg, New York. We are ready to get you the business insurance that you need today.