Business Interruption Insurance — Why And How To Get Covered

If you own a business, you always run the risk that some emergency will stop or slow down your normal business operations. Emergencies take many forms, but such things as fires, flooding, rioting, or a shutdown order are all outside the control of a business owner. What can you do to combat this universal concern?

One of the best moves is to have sufficient business interruption insurance. What is this type of valuable insurance? And how can you know if you have the right coverage? Here are a few answers.

What Is Business Interruption Insurance?

As its name suggests, business interruption insurance kicks in when an emergency causes you to shut down part or all of your business operations. Typically, this includes most natural disasters, governmental orders, on-site disasters (such as a fire), and civil unrest in your neighborhood. 

If a disaster triggers your coverage, you can expect to get reimbursement for many related expenses that wouldn't normally be covered by standard policies. For instance, property insurance would pay for the replacement of a roof after a tornado. But if the repair of that damaged roof might cause you to shut your store for days or weeks, the business interruption policy would help pay for your economic losses, expediting fees on materials or a contractor, or a temporary roof covering to help you stay open. 

What Coverage Should You Have?

Of course, not all insurance coverage is the same. Determine your particular insurance needs by assessing a few factors. First, what specific dangers does your business face locally? If you live in earthquake country or an area prone to flooding, you may need additional riders to cover such emergencies. A business should also ensure that the limitations and scope of their policy meet its current business size. 

Finally, not all business is handled through a brick-and-mortar location. If you use any outside platform to operate online retail sales, you will likely need a special type of interruption insurance known as seller suspension insurance. This targeted insurance provides similar protection against a unique disaster: the unexpected suspension of your operations on a sales platform. 

Where Can You Learn More? 

Is your business currently lacking interruption insurance coverage? Or have you assessed your existing policies to see if they still fit the company's modern needs? Start learning more today by meeting with a business insurance agent in your area. This small investment of time and effort will go a long way to protect yourself and your business investment for years to come.