Do I Need Business Interruption Insurance?

Business interruption insurance can be as vital to the survival of a business as fire insurance. Too many business owners fail to think about how they would manage if a fire or other disaster damaged their business premises to the point of being temporarily unusable. This valuable coverage can either be added to a commercial property policy or included in a commercial package policy.

Business Interruption insurance compensates you for lost income should you have to vacate the premises due to disaster related damage that is covered under your commercial property policy. It also covers the profits you would have earned (based on financial records) had the disaster not occurred. The policy also covers expenses (eg. Electricity) which would continue even though the business had come to a temporary halt.

Be sure the policy limits are adequate to cover your company for more than a few days. It can take much longer than many people would anticipate to get a business back on track after a major disaster. There is generally a waiting period of 48 hours prior to the business interruption coverage kicking in.

Keep in mind, a business that has to close down completely while the repairs are being completed stands a good chance of losing out to their competitors. A quick resumption of business after a disaster is essential.