What is included in a business interruption insurance policy?
Many business owners fail to consider how they would manage if a fire or natural disaster rendered their business premises temporarily unusable. According to the Federal Emergency Management Agency (FEMA), almost 40 percent of all businesses that close down following a disaster never open again.
With advanced planning, there are measures you can take to protect your company’s bottom line.
Is your company prepared for disaster?
- Covers lost income due to vacating the premises as a result of disaster-related damage.
- Covers the profits that would have been earned based on previous financial records, had the disaster not occurred.
- Covers operating expenses, such as utilities, that must be paid even though business temporarily ceased.
Business income coverage is designed to replace income your business would have incurred had no loss occurred. Business income is generally defined as the net profit or loss before taxes, plus continuing normal operating expenses, including ordinary payroll (payroll for employees other than officers, executives, department managers or employees under contract). Coverage is generally limited to the loss of income sustained until the property is restored, and/or a specific time frame following the loss.