Many small and medium-sized businesses take out an insurance policy that combines both liability and property coverage into one complete package. Within the business owners policy coverages, there is a particular type of protection called business interruption coverage. Understanding how this coverage works is important, in the unfortunate event your business needs to take advantage of it.
Business interruption coverage comes into play when an unexpected event, such as a flood or fire, causes you to interrupt your business operations for a period of time. The coverage provides for a range of damages resulting from the interruption, including loss of income and fixed costs. Sometimes this coverage also includes expenses for running the business out of a temporary location until the original location can be restored to working order.
When you’re choosing your business owners policy coverages, make sure you understand how long the business interruption coverage extends. If your place of business is damaged and unusable due to a natural disaster, it’s likely that it will take quite some time to get things up and running again. So interruption coverage that only protects you for a few days will in most cases not be sufficient.
A business owner policy is a great foundation to your company’s insurance coverage. It includes business interruption coverage to ensure that you are protected if you have to close due to a natural disaster or event that renders your business unusable.