THURSDAY, MARCH 30, 2023
Have you ever stopped to consider what would happen if your business closed unexpectedly for a few days? How would you make up the income lost during that time or pay your existing employees? Here are four tips to consider.
Fortunately, there is a type of insurance called interruption coverage that can help. It is usually included as part of a Business Owner’s Policy (BOP). It helps cover lost income while your business closes due to factors outside of your control.
Tip #1: Know What Business Interruption Insurance Covers
First, it is important to know what this type of business insurance covers. Generally, this includes profits you would have earned if you hadn’t closed. It might also cover normal operating expenses such as staff wages or utility costs. The cost of moving your business to a short-term location is also considered. Payouts always depend on accurate records of your company’s income and expenses. It is very important you have access to these documents. 
Tip #2: Understand What the Policy Doesn’t Cover
Of course, there are a few things your business insurance won’t cover. For example, certain bills and partial closures are generally excluded. Events that aren’t covered on your policy, like flood and earthquake damage, won't have protection. This part can differ from one insurance provider to another, so make sure to speak with your agent to learn more.
Tip #3: Read the Fine Print
Another tip is to read the fine print in your policy. Insurance has a lot of very specific terminology that affects your coverage. It is always better to be completely sure of what your interruption insurance covers instead of making an assumption. If there’s anything you don’t understand, discuss it with your agent.
Tip #4: Make Sure This Type of Policy is Appropriate for Your Business
If you’re paying for business insurance, it is important to make sure the policy itself is right for your needs. For example, a dog groomer would probably need business interruption insurance more than someone who is a freelance contractor. In fact, those with brick-and-mortar locations likely need more business interruption coverage than those who have more mobility in their daily workflow.
Not sure if your Business Owner’s Policy includes interruption coverage? Contact us to learn more or to schedule a no-obligation policy review where we can answer your questions.
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