Commercial
Property
You have insurance for your business equipment and property, but have you thought about what you would do if an unexpected event stopped you from operating your business? How long will you be closed and how much income loss might you suffer?
Business income coverage can help safeguard your business during an unforeseen circumstance. The following are two potential scenarios that illustrate how this product protects you.
Scenario 1: Your company is affected by a storm
Imagine your company’s property is damaged by a heavy storm. Water seeps through the roof and you lose electricity. The damages are extensive. A generator allows you to resume operations while the power is down. The policy you purchased includes a “utility services” endorsement with power supply coverage.
Your insurance company is also paying for business income loss as well as rent or mortgage, employee wages, Loan payments and utilities and taxes during the “period of restoration,” since you had to close the office to repair the damages. Your policy also includes coverage for “extended business income,” which keeps you afloat for a couple of months while you restore your operations. (Extended business income typically lasts until your business operations return to a level that generates pre-loss business income, or 60 consecutive days after the date of direct physical loss or damage (whichever is sooner).
Scenario 2: Your business is robbed
Imagine you own a small restaurant and it’s robbed on a Saturday night. Employees and customers are locked in a cooler while thieves empty the cash drawer. The computer that operates the register and customer ordering system is broken. You can’t get a new computer until Monday morning, so your business remains closed until then.
Your policy includes an “open perils business income coverage form (without extra expense)” and “extended business income.” So your insurance company pays for the business income loss for the balance of Saturday night and all day Sunday. However, your business experiences a decrease in business the week after the robbery. Patrons are hesitant and fearful to return to your business after the event. This results in additional lost income, which the insurance company also pays for.
All of the conditions that are typically required to qualify for “covered extended business income” are included in this case. Your business was suspended due to damage to the computer ordering system.
What coverage is important for your business?
Extended business income coverage can be tailored to your business needs, such as your revenue and seasonal income fluctuations. For a more complete understanding of what your policy should include, talk with your insurance professional. They can give you peace of mind, knowing the company you worked so hard to build will be protected in an unexpected event.