3 Things To Know About Business Interruption Insurance Coverage
When you run a business, one of the ways you can protect it is by purchasing the right types of insurance policies and types. While there are a lot of options out there, one important type you should consider buying is business interruption insurance. This type of insurance is great for almost any type of business, and it offers a lot of benefits if something destroys your business and prevents you from operating. Here are several things to understand about business interruption insurance.
Why you need it
Imagine if an earthquake, flood, or fire destroyed your business or knocked out the power to your business for an extended period of time. Would your bills stop coming in the mail if this happened? Most of the bills you have would probably continue coming, and your creditors would expect you to pay them. This can include your mortgage, business loan, utilities, insurance, and any other expenses your business has.
If you do not have business interruption insurance, you would probably end up losing your business if this happened, simply because you would not have any revenue to pay these expenses. This is why you need business interruption insurance coverage.
What business interruption insurance is
With business interruption insurance, you will have coverage if something like this happened to your business. Your insurance policy would cover lost revenues due to the catastrophic event, rent expenses, wages, taxes, and many other things. Because of this, you would not have the risk of losing your business, because you would have money coming in to cover these expenses.
You can choose the level and amount of coverage you would like for your policy, and you should make sure you choose enough coverage to help you stay afloat until your business could get back to its normal operations.
The limitations of this type of insurance
As with any type of insurance coverage, business interruption insurance has limitations. The main thing you should know is that it only kicks in if the catastrophic event is something that your regular business insurance covers. For example, if you do not have flood insurance and a flood destroys your business, your business interruption insurance would not cover the losses you experienced from the flood. If you want your business to be protected against floods, you would have to purchase a flood insurance policy.
Having the right types of insurance for your business is important. Contact an insurance agency today, like Insure With U.S., to learn more about the types of insurance you may need.