As a business owner, there are certain problems you can plan for, such as a power outage or a seasonal slowdown. However, some occurrences can cause a major disaster and result in thousands of dollars’ worth of damage, as Hurricane Harvey did to the automobile business in 2017. Some businesses never recover after being hit by serious damage, mostly because a forced closure ruins their profit margin. Business interruption insurance can protect you against an unexpected closure, and there are several other benefits that might assist you as well.
1. It Can Help You Relocate
If your commercial building is damaged to the point where you can no longer operate out of it, business interruption insurance may pay for you to move to a temporary site so you can continue running your business as repairs are made. This can also be beneficial to your employees, who will not have to face downtime or layoffs because of flooding or fire. It may also pay to have necessary items shipped to the new location, such as office furniture or computer components.
2. Reimbursement for Supply Cutoff
Business interruption insurance can cover more than your property. For example, it can reimburse you for lost profits if your supply company suffers damage and must shut down. Without this type of coverage, you might need a law firm like Tully Rinckey, which is experienced in business law, to help you file a court case and recover your losses.
Business interruption insurance can help you recover supply shutdown losses even if your supplier is located in another state. For instance, if you own a New York restaurant that specializes in organic dishes and your vegetable supplier in Southern California is forced to shut down due to a wildfire, your insurance coverage reimburses the cost of your lost profits. This can help keep your business open until you can find another supplier where you might be forced to close otherwise.
3. It Can Bolster Existing Coverage
Experienced law firms that offer a wide range of business services, such as Tully Rinckey Professionals, can help you decide the best ways to protect your business, property, and employees from legal issues that may affect your business. However, when a natural disaster strikes, you have little recourse when it comes to getting compensation. This is where business interruption insurance can make a fine addendum to your existing policy.
While you might worry about the added expense of business interruption insurance, consider this: flooding or fires that start as the result of a lightning strike or a fast-moving wildfire can leave complete destruction in their wake and even level your business. The cost of rebuilding, paying your employees, and moving to another location may cause thousands of dollars or even put you out of business in the end. Paying a bit extra each month for business interruption insurance can be a worthy investment and protection against a worst-case scenario.
4. There Are Different Policy Choices
You probably put a lot of work into >creating a business budget and you might not be certain if you can afford this type of insurance. However, one benefit to business interruption insurance is that the terms are usually flexible so you can buy as much or as little as you need. You can start out with a simple policy and then add more coverage later, during times of plenty. This can give you peace of mind that your biggest investment is covered without you having to stretch your budget each month to pay the premium.
Buying business interruption insurance can help you protect your growing company’s profits in case of a natural disaster or other occurrences beyond anyone’s control. Working with your current insurance provider can help you understand how much coverage you need and how to choose which benefits can best defend your business.