You have insurance for your business equipment and property, but have you thought about what you would do if an unexpected event stopped you from operating? How long would you be closed, and how much income loss might you suffer?
Business income coverage can help safeguard your business in unforeseen circumstances. The following are two scenarios that illustrate how this product protects you.
Scenario 1: Your company is hit by a hurricane
Imagine your company’s property is damaged by a hurricane. Water seeps through the roof, and you lose electricity. The damages are extensive. The policy you purchased includes a “utility services” endorsement with power supply coverage, so your insurance company pays for your lost inventory, rent and payroll while the power is out.
Your insurance company also pays for business income loss during the “period of restoration,” since you had to close the office to repair the damages. Your policy also includes coverage for “extended business income,” which keeps you afloat for a couple of months while you restore your operations. (Extended business income typically lasts until your business operations return to a level that generates pre-loss business income, or 60 consecutive days after the date of direct physical loss or damage (whichever is sooner).)
Scenario 2: Your business is robbed
Imagine you own a small restaurant and it’s robbed on a Saturday night. The thieves lock your employees and customers in a cooler while they empty the cash drawer. The computer that operates the register and customer ordering system is broken. You can’t get a new computer until Monday morning, so your business remains closed until then.
Your policy includes an “open perils business income coverage form (without extra expense)” and “extended business income.” So your insurance company pays for the business income loss for the balance of Saturday night and all day Sunday. However, your business experiences a decrease in business the week after the robbery. Patrons are hesitant and fearful to return after the theft. This results in additional lost income, which the insurance company also pays for.
All of the conditions that are typically required to qualify for “covered extended business income” are included in this case. Your business was suspended due to damage to the computer ordering system.
What coverage is important for your business?
Extended business income coverage can be tailored to your business needs, such as your revenue and seasonal income fluctuations. For a more complete understanding of what your policy should include, call us. We can help you find the right business income coverage, giving you peace of mind that the company you've built will be protected if the unexpected happens.