BUSINESS INTERRUPTION INSURANCE

Running a business in any industry is filled with risks and intense competition that are difficult enough to manage. When your hard work is threatened by a natural disaster – something that you as an owner have little control over – then your elaborate plans and strategies can quickly become moot.

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To keep your efforts sustainable through the unlikely but uncertain event of a natural disaster, it is important to know what your options are for enhanced insurance coverage. Business interruption insurance is an essential part of protecting your business from these types of events and will allow you to continue to focus on providing high-quality goods and services throughout any disaster.

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WHAT IS BUSINESS INTERRUPTION INSURANCE?

Fundamentally, business interruption insurance is coverage that will protect you and your company from financial losses that may be incurred if your business suffers from a loss of income after a disaster. This can include provisions for covering the actual income that you are losing out on in the case of a business closure, or it can help to repay the costs of rebuilding and repairing your premises after the disaster has passed.

 

WHY IS BUSINESS INTERRUPTION INSURANCE SO IMPORTANT?

Business interruption insurance is especially important to cover losses in the case of fires and powerful winter storms. These frequently disrupt the normal day-to-day business of many in the Toronto area and – without adequate coverage – these businesses may face an insurmountable financial burden. 

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Nobody can predict when or who will be most impacted by natural disasters. If you want to be sure that the hard work and capital investment you have put into your business are not whisked away from you overnight by such an event, then it is extremely prudent to include business interruption insurance in a comprehensive plan to protect your company. 

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WHAT DOES BUSINESS INTERRUPTION INSURANCE COVER?

Specifically, business interruption insurance covers a range of elements related to the temporary closure of your business in the wake of a disaster. This can include lost profits (which are usually based on previous financial statements), the fixed costs of operating your business (such as mortgages and taxes), expenses related to the establishment of a temporary location while your primary location is being restored, as well as expenses related to the mandatory closure of a business related to governmental dictates (such as in the case of an emergency or when streets are closed for an event).

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You may also need to cover operating costs such as rent, electricity, and other utilities while your business is out of commission. Payroll costs will also need to be taken care of in order to keep your employees on board throughout the interruption.

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Property insurance, on the other hand, covers physical damage to a business but does nothing to ensure that your income stream is secured in the event that you must temporarily close up shop. Usually, business interruption insurance is an additional policy option that can be added to traditional property insurance coverage.

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When you take out an insurance policy with business interruption coverage, make sure to specify if you are seeking protection from named hazards and risks or simply want to protect yourself against all possible forms of damage. The latter case will usually require a higher premium, though it will provide you with the peace of mind that your business will continue to generate income in the case of a significant disaster or interruption of any type. 

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As a business owner, you also have the option of purchasing limited or extended indemnity protection. The former will pay out until your business resumes its operations, while the latter will continue to pay out until your business restores its previous level of monthly earnings.

Contingent business interruption insurance can even protect you against the event of one of your suppliers or clients being temporarily out of service. For example, if your largest supplier is suddenly vandalized and unable to operate until the damage is repaired, your business will also suffer. You can use business interruption insurance to restore your lost income from these types of interruptions as well.

 

WHO NEEDS BUSINESS INTERRUPTION INSURANCE?

When you consider the fact that virtually no business is immune from the uncertain impacts of a major disaster, then you will realize that virtually all businesses need to consider the benefits of business interruption insurance. Due to the fact that anyone could be threatened by fires, floods, or vandalism at any time, it is imperative that you consider business interruption insurance.

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Certainly, business interruption insurance is only one small part of a comprehensive approach to protecting your business. If you are serious about keeping your business safe, then you must also explore options like public liability insurance, commercial vehicle protection, professional liability insurance, equipment breakdown insurance, property insurance, and even cyber-attack coverage. There are many risks that businesses face in contemporary times and balancing the cost of insurance with the amount of protection that is necessary to be safe will be different for each business. 

 

WHY GO WITH LIBERTY MUTUAL INSURANCE?

If you want to be confident that your business is covered in the case of any potential interruption, then you need professional brokers who understand the nuances of your business and the nature of your industry. We understand interruptions to business will impact each company differently. Not all brokers have worked with such a diverse array of clients as the experienced and expert team at Liberty Mutual Insurance has. 

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With Liberty Mutual Insurance, you can be sure that the well-being of our clients is our top priority. We have worked to cover business interruption concerns for many companies throughout the years in many industries. We always find a solution that is comprehensive and tailored to the specific needs of each client. 

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Get in touch with our team today to learn more about business interruption insurance and how it can benefit you. You can reach us through our online contact form.