Byrne-Kim, Inovative Insurance Solutions and Risk Management, for management liability, home health liability and workers compensation
Business Interruption Insurance:
BUSINESS INTERRUPTION COVERAGE – A COVERAGE THAT YOU CANNOT AFFORD
TO BE WITHOUT!

Business interruption insurance is as vital to your survival as a business as is fire insurance. Most people would never consider opening a business
without buying insurance to cover damage due to fire and other catastrophes. Still too many small to medium business owners fail to think about how they
would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable. Business interruption coverage is not
sold separately. It is added to a property insurance policy or included in a package policy.

A business that has to close down completely while the premises are being repaired may lose out to competitors. Getting back to full operations after a
disaster is essential.

  • Business interruption insurance compensates you for lost income if your company has to shut down or leave the premises due to disaster-related
    damage that is covered under your property insurance policy, such as a fire. Business interruption insurance covers the profits you would have
    earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, or rent on the
    current premises that continue even though business activities have come to a temporary halt.

  • Make sure the policy limits are sufficient to cover your company for more than a few days, if your premises is a total loss this could take several
    months to have it rebuilt, Business Interruption usually covers costs to rent another temporary premises until your premises is fully functional
    again, this is known as Extra Expense. After a major disaster, it can take more time than many people anticipate to get the business back on track.
    There is generally a 48-hour waiting period before business interruption coverage kicks in.

  • Business Interruption Insurance comes in many forms, some carriers will other actual loss sustained, but many will only offer coverage with a set
    co-insurance.  So be sure to ask your Broker what coverages are available and be sure to know what you have purchased and how your coverage
    works.

  • Extra expense insurance reimburses your company for a reasonable sum of money that it spends, over and above normal operating expenses, to
    avoid having to shut down during the restoration period. Usually, extra expenses will be paid if they help to decrease business interruption costs.

Three things to consider when purchasing Business Interruption Insurance:

  1. How much income do you need to continue operating your business in the event of a shutdown of your premises?
  2. How quickly will the policy become active after you report an incident?
  3. Will you need additional coverage for extra expenses such as leasing temporary office space, computer equipment or office machines?

These coverages come as an endorsement on your Property Policy, or as a package, always ask your Broker if your Policy includes a proposal for this
coverage or if it can be added.
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