Business life in itself is a risk. You knew this going in, but you took it on with a celebratory spirit. You knew all it would take was one straw to break for the house of cards to come crashing down.
But you have prepared. You have taken out insurance policies to cover yourself and your business. The question remains, are you fully protected? You have protection for your building, the equipment you use, and vehicles you drive should you use them; moreover, you have protection for your employees and may even extend health benefits to them.
But what about the business itself? What would happen if you had to shut your doors tomorrow for an unexpected emergency?
What Is Business Interruption Insurance?
Traditional business interruption insurance covers income that would be lost, should there be a covered peril against your business. This is not a separate policy but added to your existing business insurance policy.
What Is a Covered Peril?
A covered peril is an event like fire, wind, or theft that would require you to close your business doors for an undetermined extended time period.
What Is Covered under Business Interruption Insurance?
This type of insurance usually covers losses when the business is closed due to theft or fire. It will also cover temporary relocation, along with payroll for employees.
What Types of Businesses Is Business Interruption Insurance Good For?
Most smaller companies are eligible for and already carry insurance that includes business interruption insurance. If you have a BOP, then you are covered. Having just commercial property and general lines, however, puts you at risk. You need business interruption to complete your full coverage.
The best fit for this type of insurance is for those who rely on their location to conduct everyday business, or for those who house their equipment, such as:
Spas and salons
Gyms and spas
Emergency events at these types of facilities can create losses for the owners, making it challenging to generate income during a shutdown of their business. Business interruption insurance can assist the owner to recuperate losses, while the commercial insurance payment portion helps assist with relocation or rebuilding.
How Can Business Interruption Insurance Help Your Company?
The Boy Scouts have a motto of “Be Prepared.” This should also be the motto of small to mid-sized businesses. You prepare for promotions, the slow season, the busy season, and new policies that come down from corporate, and even some that are handed to you federally.
But rarely do you consider what would happen if an emergency should close your doors for an undetermined time period. This is the purpose of business interruption insurance.
Business interruption insurance can help you in the following scenarios:
If your next-door business has a fire that spreads to your unit, and you experience a total loss.
A severe windstorm blows through and leaves your building uninhabitable.
The city decides to shut down the street your business resides on, thus closing down your business for two weeks while road work is being done.
Depending on the damage, you are faced with finding a new home or a temporary space until repairs are completed. You will also need the means to relocate products, pay loans or rental fees you may have on your business, you need to pay your employees, and pay taxes that are due.
Your company is your livelihood, and you need to protect your investment. You depend on your business’ success to support your lifestyle. So do those you employ. Your customers trust you will be there for their needs as well.
Business interruption insurance allows you to maintain your commitments while your business takes time to heal. Without it, you are open to losing what you have worked so hard to build.
Understanding the needs of your business does not have to be a battle you walk alone; rather, you can talk to an expert who understands your situation.
For over 70 years, the licensed specialists at Lead Carpenter Kemps have helped Californians obtain the insurance they need to keep their businesses up and running with the experience and professionalism your business deserves. Contact us today for a quote!
Scott has been been managing commercial insurance risk for the past 25 years with LCK.
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Leap | Carpenter | Kemps Insurance Agency provides Commercial Business Insurance, Employee Benefits, Life and Health Insurance, and Personal Insurance to all of California, including Merced, Atwater, Los Banos, Mariposa, Madera, Fresno, Modesto, Turlock, and Stockton.
CA License Number 0646081 | Licensed to do business in California, Arizona, Hawaii, Idaho, Montana, Nevada, North Carolina, Oklahoma, Oregon, Virginia, West Virginia and Washington.