Insurance is vital to any business. It can protect your property, provide liability and do much more. One coverage that is essential to any business and can sometime be overlooked is business interruption insurance or better known as business income insurance.
Business income insurance covers the loss of income that a business suffers from having to close its doors and rebuild due to a covered event. It was designed to put a business in the same financial position as it would have been if no loss had occurred.
The following are typically covered under business income insurance:
Profits that would have been earned (based on prior month’s’ financial statements).
Operating expenses and other costs still being incurred by the property (based on historical costs).
Some policies cover the extra expenses for moving to, and operating from, a temporary location.
Commission & Training Cost
Business Interruption (BI) policy essentially covers the cost of providing training to the operators of the machinery replaced by the insurer following the insured events.
Reimbursement for reasonable expenses (beyond the fixed costs) that allow the business to continue operation while the property is being repaired.
Civil Authority Ingress / Egress
Government-mandated closure of business premises that directly causes loss of revenue. Examples include forced business closures because of government-issued curfews or street closures related to a covered event.
I encourage you to review your current insurance policies to make sure you have business income insurance on your policy. If you do not know what you are looking at, I would be happy to sit down and review your current insurance program with you.