Are you a business owner? Have you ever thought about what would happen to your business income if an unfortunate event should occur?
Have no fear. That’s what Business Income Insurance is for.
This type of insurance is more specifically defined as Loss of Income, Business Income, or Business Interruption Insurance. If you are a business owner, you may want to consider talking to your commercial insurance agent about it and if you need to have this coverage.
To collect on a Business Income Insurance claim, the unfortunate event causing the claim must be an insured peril. The insurance comes in many different forms. Basically, it covers a business for continuing expenses such as rent, utilities, mortgage payments, and key employee salaries as well as loss of revenue caused by the loss of sales. In some cases, Extra Expense coverage is also included in the policy to cover the extraordinary expenses associated with getting a business back “in business.” Some examples include: leasing equipment temporarily; bringing in temporary help to input orders; and costs incurred with temporarily moving the business to another location.
What is the proper value for business interruption?
This is a question that your commercial insurance agent can help you to figure out.
Often, smaller retail businesses have Loss of Income coverage in their insurance policies for an amount called “Actual Loss Sustained – 12 Months.” This means that the value is undetermined until the loss occurs. It is valued at the actual amount of the loss of income and will cover for a maximum of 12 months after the loss occurs.
For larger businesses and manufacturers there are worksheets that can help determine insurable business interruption values. These worksheets use net sales figures, continuing expenses, and estimated down times. Due to their complexity, someone with an accounting background should complete these forms.
In any event, the coverage for potential loss that Business Insurance Income provides should be an integral part of every business’s insurance portfolio. Contact our experienced commercial lines representatives today to make that happen for your business.