Five Star Insurance Brokers Ltd. recognizes that insurance against loss of business income resulting from damage to property is as important as insuring the property itself.
Business Interruption Insurance can be as vital to your survival as a business as fire insurance. Most people would never consider opening a business without buying insurance to cover damage due to fire and windstorms. But many small business owners fail to think about how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable.
Business interruption coverage is not sold separately but it can be added to a commercial property insurance policy or included in a commercial package policy. A business that has to close down completely while the premises are being repaired may lose out to competitors. A quick resumption of business after a disaster is essential. There is generally a 48-hour waiting period before business interruption coverage starts.
Business interruption insurance compensates you for lost income if your company has to vacate the premises due to disaster related damage that is covered under your property insurance policy, such as a fire. Business interruption insurance covers the profits you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses like electricity that continues even though business activities have come to a temporary halt.
Generally business interruption insurance limits are sufficient to cover your company for more than a few days. After a major disaster, it can take more time than many people anticipate for the business is back in operation.
The price of the policy is related to the risk of a fire or other disaster damaging your premises. All other things being equal, the price would probably be higher for a restaurant than an accountants office, because of the greater risk of fire. Also, an accountant can easily operate out of another location.
We offer many different business interruption forms, in order to properly respond to the unique characteristics of your business. For example, if you are a building owner, you can insure against the reduction in your rental income. If you are a manufacturer, you can obtain coverage for extra expenses to continue operations at temporary premises, as well as to insure the shortfall in your gross earnings following a fire or other accidental damage at your regular location.
There are several forms of business interruption coverage available depending on the needs of the business. These can be in the form of Gross Earnings, Profits or Actual Loss sustained. It is also even possible to cover the additional costs of Professional fees incurred in order to determine the loss in the event of a claim. Whatever type of business interruption coverage you choose, various extensions are available. These include power interruption, as well as interruption resulting from damage at suppliers’ and customers’ premises.