What Is Business Interruption Insurance?
Business interruption insurance, also known as business income insurance, can reimburse a business owner for their lost income and operating expenses following a disaster, such as:
- Wind
- Hail
- Vandalism
- Fires
- Building or Equipment Damage
It is not sold as a separate policy. Instead, it can be purchased as an add-on to an existing commercial insurance policy.
How Does It Work?
Business interruption insurance coverage will pay out if the cause of a business income loss is covered in the policy in an amount that is determined by your business’s past financial records.
The insurance coverage will last until the end of the business interruption laid out in your policy. A standard policy provides 30 days of coverage, but endorsements can extend it for a much longer period.
With most business interruption insurance policies, the period begins on the date that the covered peril began, and it ends on the date that the damaged property has been repaired and returned to the condition it was in before the disaster.
In some cases, there may be a waiting period of 48 to 72 hours before it will kick in.
Our Business Interruption Insurance Coverage
At Burton & Company, we tailor our business interruption insurance policies to suit the needs of your business. However, this type of insurance will typically cover:
Fixed Costs
This might include operating expenses and other costs of doing business.
Profits
Reimbursements for profits that the company would have expected to earn if the event had not occurred will be paid based on prior months’ performance.
Commission And Training Costs
If your company needs to replace machinery or retrain employees on how to use new machinery, these costs may be covered.
Temporary Location
Some policies will cover the costs of moving to a temporary business location and operating from this location.
Employee Wages
This coverage can help business owners to make their payroll while they are unable to operate, which allows them to avoid losing valued employees while the business is shut down.
Taxes
Because businesses must still pay taxes in the wake of a disaster, this coverage can ensure the business manages to pay its taxes on time to avoid penalties.
Civil Authority Ingress And Egress
If a business interruption event causes a government-mandated closure of your premises that leads to direct financial loss, such as forced closures due to government curfews, your business interruption insurance can help.
Loan Payments
Business interruption insurance can help your business to make monthly loan payments, even when you’re not generating income.
What Is Not Covered?
There are a few exclusions on most business interruption insurance policies, such as:
- Income that was not in the business’s financial records
- Earthquakes
- Floods
- Utility outages
- Pandemics
- Property damage
Get Business Interruption Insurance Today
A disaster doesn’t have to spell the end of your business. Reach out to the Burton & Company today to find out how we can help you protect your business income when something unexpected happens so you can focus on getting back to normal and doing what you love. Call us at (888) 652-1325 or request a quote online to speak with a Virginia business insurance agent.
