Business Interruption Insurance Explained

A store sign saying the establishment is closedAs a business owner, it’s important for you to think ahead and prepare your enterprise for the unexpected. That includes incidents beyond your control such as fires, hurricanes and floods. These disasters destroy not just your property – they also lay waste on your overall business performance when they force you to close shops for days or weeks.

The problem is that while you’re scrambling to recover, people’s wages, utility bills, taxes and the movements of your competitors go on as usual. This can put you at a very precarious situation that can only worsen with time. Fortunately, you won’t have to dig yourself out of a hole when disaster strikes and work stoppage ensues. Business interruption insurance can keep you afloat during your most vulnerable moments.

Business interruption insurance pays for the revenue that would have been made if the disaster didn’t happen. With this kind of coverage in place, your cashflow is protected while you try to restore normal operations to your enterprise. The funds you receive from business interruption insurance will cover your operational costs for the time your business is down so you won’t have to dig into your company’s savings to pay for everything.

This type of insurance usually isn’t offered as a stand-alone product. Most insurance firms will provide it as an add-on to property insurance and comprehensive coverage packages. The cost will vary depending on the firm and the inherent risk that your business faces with respect to disasters. Obviously, it would cost more to insure a restaurant (which uses stoves and gas) than it would to insure a marketing agency. If you live in areas that are prone to hurricanes, tornadoes and earthquakes, expect to pay more because you’re more likely to use your insurance at some point.

Granted, business interruption insurance is an additional cost that you’ll have to budget for, but this is the way to go if you want your business to withstand the most adverse of situations. Check with Quote Texas today and learn more about how you can make sure that your business doesn’t go under when disaster happens.