What Is Business Interruption Insurance, And Why Does My Company Need It?

If you own a business, you are at risk of failing if you experience a catastrophe and don’t have business interruption insurance in place. Business interruption insurance helps by replacing lost income and paying for extra expenses if your Frederick, MD business suffers a covered peril. 

Why Do I Need Business Interruption Insurance? 

This type of insurance will protect you in the event that your business experiences a loss of income due to perils listed in your business owner’s policy. Common perils include fire, wind, theft, lightning, and falling objects. 

For example, if your business experiences a fire that leaves your building unfit for business, destroying your merchandise, you can be reimbursed for: 

Lost Income – For merchandise destroyed minus expenses such as shipping 

Extra Expenses – If you have to pay for rent on a temporary location 

If you own the building, your Wellspring Insurance Network Inc. property coverage insurance policy will pay to repair the property. 

How Much Business Interruption Insurance Coverage Do I Need?  

There are coverage limits to business interruption insurance, based on your policy. Financial losses above and beyond that coverage are your responsibility, so it is important to choose the coverage that is appropriate for your specific business needs. When choosing the amount of business interruption coverage for your Frederick, MD business, here are some things to consider: 

  • How long will it take to get your business back up and running after an event? 
  • Are your sprinklers up to date and functioning? 
  • If you rent, is your building protected against perils? 
  • How soon would you be able to find alternative space in your area? 

It would be wise to think about the potential time frame you’ll need to restore your business to a functioning status after a loss. This time frame will determine how much profit your business might stand to lose and can vary depending on the severity of your business loss. For example, while a small fire may only require a month-long restoration period, a major regional event like a hurricane may require months of restoration. 

Are you considering buying an insurance policy with business interruption coverage? Call Wellspring Insurance Network Inc. today for information about how business interruption coverage can give you peace of mind.