While some businesses are perfectly safe with just one type of business insurance, others need more comprehensive policies. One of the most common types of insurance needed for business is business interruption insurance which covers the loss your business might experience in the event of a temporary shut down or compulsory move. It provides financial support to help you stay on your feet. Another way business interruption insurance can protect your business and offer support is by covering lost wages.
Temporary Business Shut Down
Perhaps your business location is compromised by a fire outbreak, or a natural disaster causes damage to your place of business. Business insurance ensures you have enough to cover the expenses for needed repairs. Due to the extensive damages experienced, you might need to shut down your business temporarily. This might cause you to lose profits that you would normally make if everything were going well.
With a proper business interruption insurance policy, these financial gaps and profit losses can be covered. In case you need to move to a new location during the repair of your original business location, business interruption insurance covers the cost of relocation and the fees for operating at that new location.
Lost Wages Coverage
As for the business aspect, everything is covered by business interruption insurance. However, employees must also be considered. Since the business might be on hold for a while after an unpleasant incident, some employees might decide to get a different job since most people can not afford to lose their income for an extended period. Business interruption insurance can help to cover lost wages, so your employees do not need to seek other employment while you rebuild and work towards resuming regular business activity.
There is a limit to the amount of lost wage coverage offered by insurance companies. This limit is calculated by using the average fees and costs you paid out during the last few weeks leading up to the incident. This gives the insurance company a good picture of your normal operating costs, including your employees’ wages.
If possible, move your business to a temporary location where you can operate while waiting for repairs to be completed. This will limit the amount of time you have to rely on insurance and how much your insurance company has to pay out for the claim. Keeping your claims lower will help to keep insurance costs from increasing in the future.
The Right Kind of Coverage
Without the right kind of coverage, you might end up feeling the complete financial effects of an unfortunate event. Business interruption insurance is one of the most valuable insurance for the continued progress of your business. It gives your vendors assurance of no interruption in your business and helps your business stay profitable.
For more information, you can contact your insurance agent or speak to our experts at Pittman Insurance Group, LLC. We are here to discuss and clarify any questions you might have about business interruption insurance.