Continuity is critical in business, and there are a few things more important than continuous revenue and cash flow, particularly for small to medium size organizations. In fact, just one brief business interruption can be incredibly costly for an organization often leading to serious reputational damages or long-term closures.
Introducing Business Interruption Insurance
That’s where business interruption insurance can help. This form of coverage provides protection against a variety of common interruptions, including natural disasters, equipment, damage, or vandalism. So we’ll be discussing five benefits to having this type of insurance coverage.
- Benefit number one, the most important one is revenue. In the event of a disruption business interruption insurance provides coverage for income your business would have earned during a closure period if it had been operating normally.
- Benefit number two is rent or lease payments. Even if your premises are unusable after a disaster or some other event lease payments are still due. Business interruption insurance allows you to keep making rent or lease payments even if your business is not operating.
- Benefit number three is relocation, in the event that your primary location is unusable. Following a disastrous event, you will likely have to relocate to keep the doors open and keep generating business. Business interruption insurance can cover the cost of having to relocate your business, but the temporary location and may include both moving and rent costs.
- Benefit number four, and this is a big one is employee wages. You’ve put in time and energy to build the ideal team for your business. But now if your business is unable to operate, it’d be difficult to make payroll. Business interruption insurance can help you avoid losing staff while you’re closed by ensuring that your employees are getting paid. This is especially important as finding new employees is often, far more expensive than keeping the ones you already have.
- And lastly, benefit number five is loan payments. If you have an outstanding loan, you’re still required to make payments even if your business is not fully operational. Business interruption insurance will ensure you never miss a payment until your business is fully operational again.
This type of coverage was designed to give your business the assets it needs when it needs it most. The fact that matters is that these policies are complex. A lot of numbers go into that. So it’s important that you work closely with your representation, as you look for your options. If this is a type of coverage that has piqued your interest for you and your business, give us a call and we’ll help you move your business from danger to a safe place.