If a natural disaster, large or small, hits your area, are you protected while your business works to recover? While different forms of insurance coverage contribute to getting your small business back on its feet, business and utility interruption insurance is a lifesaver to keep you afloat. How? Here's how it works.
What Is Business Interruption Insurance?
General commercial insurance and property insurance policies pay to replace structures and goods that were damaged by a disaster. These pay to repair your roof, replace computer equipment, and get rid of water damage. However, they don't cover your extra expenses during these repairs. For instance, if you must rent another office while your roof is replaced, you're on your own for that expense.
This is where business interruption insurance kicks in. It would cover the extra costs you incurred paying for that rented space. It might also cover paid services to do tasks your staff can't do in the rented space. And some policies could cover expenses that help you minimize losses, such as renting a generator or putting up a temporary structure to keep selling products.
What Is Utility Interruption Insurance?
Many owners opt to add a rider known as utility interruption insurance to their policy. How might this work?
Consider a retail business in a community hit by tornados. The business structure itself may suffer no serious damage from the storm. However, power and water to their property is cut off due to damage elsewhere. If the store can't open and conduct business with no lights or power, it loses money every day of the closure. But property insurance may not provide help.
Utility interruption insurance coverage would step in to help you with lost revenue. The general calculations for utility interruption coverage involves calculating the amount of revenue your business would have likely generated during the affected time, then subtracting any revenue it was actually able to generate on its own until the city got your power back on.
Where Can You Learn More?
In an age of increasing concern over natural disasters of all types, businesses need to be protected against many different scenarios. Business and utility interruption insurance helps you achieve this.
Learn more about how it could work for your specific business by meeting with a qualified commercial insurance agent in your state today. With their guidance and expertise, you'll find the right combination of coverage to keep your business thriving in any climate. Look into business insurance for more information.