Business Income or Business Interruption Insurance is a type of commercial property form that insures an organization against loss of income due to a slowdown or suspension of operations caused by a covered loss to property. In many cases the business income form will also include coverage for extra expenses incurred by the business due to the covered cause of loss in getting the business back up and running quickly. In typical cases, coverage begins after a waiting period of 24-72 hours after the loss occurs and ends once the property is physically repaired and returned to the same condition prior to the loss. However the length of coverage and amount of coverage afforded will depend on the type of business income form purchased.
Loss of income exposure is usually calculated using a business income worksheet. Types of losses include normal business profits, continuing operating expenses such as ordinary payroll, taxes, and utilities, and extra expenses incurred by the business as a result of the loss.
Business income exposure is often overlooked by many policyholders and can serve as a crucial coverage to keep a business operating after a large loss. Without business income protection, an organization that has to shut down operations for a lengthy period of time may have a very hard time recovering back to normal operations. Even after a business is restored after a loss, an organization can experience financial hardships due to their customer base not returning or going elsewhere.
Policies can be designed to protect organizations from loss of income in a variety of ways. It is important to discuss these options with your agent if this is an exposure you want to insure against.
If you are interested in obtaining business interruption insurance for your organization with one of our many reputable insurance carriers, our team of licensed and experienced agents will be happy to help you. Call us today toll free at 1-800-686-2147.