Business owners understand that success requires more than just profits. It also requires you to prepare for the unexpected. Business interruption insurance offers one such safety net. This coverage is often overlooked, despite its importance in providing financial support for businesses to cover their ongoing expenses when unforeseen events disrupt business operations. In this article, we delve into the details of business interruption coverage and how it can support your business, keep your team, and keep your client base.
Causes of Business Interruption
Businesses face disruptions from a variety of causes, including but not limited to the following:
Natural Disasters
Natural disasters such as hurricanes, earthquakes, tornadoes, and floods can strike with little warning. These storms can damage your property, interrupt your operations, and disrupt your supply chain. With the increasing severity of and costs from storms and natural disasters, it is more important than ever to be prepared.
Fires
Fires and explosions around your business premises can cause extensive damage and business disruptions. You might experience significant financial losses as a result.
Power Failures
Unexpected and persistent power outages can bring business operations to a standstill, with financially devastating consequences.
Equipment Breakdowns
Many businesses rely heavily on machinery and equipment for routine operations. When equipment fails, it can interrupt operations. Replacement times for such equipment are now longer than in recent memory and can be longer than a year.
Supply Chain Issues
Most modern businesses rely on a complex network of suppliers to meet their obligations. A disruption in that supply chain, such as a supplier going out of business or facing production challenges, might affect the company’s ability to deliver goods.
Cybersecurity Threats
In an increasingly digital society, businesses face a growing risk of cybersecurity threats, including data breaches and ransomware issues. These complications can disrupt business and cost the company significant mitigation expenses.
Civil Unrest
Social or political unrest and protests create an environment where businesses risk property damage, looting, and forced closures.
What Business Interruption Insurance Covers
The right business insurance provides financial relief during difficult times. It usually includes coverage for lost income as a result of the closure. It also covers the cost of your company’s ongoing expenses, such as rent, utilities, and employee wages until you can reopen, ensuring employee retention.
If your business needs to temporarily move to another location, your policy usually covers those relocation costs. It often pays the loan payments for any outstanding business loans as well. It even can cover your tax and utility payments, recovery costs, and changes to your supply chain when necessary.
Protection Against the Unexpected
Interruption insurance helps your company ensure it has the protection necessary to maintain operations even in the face of unexpected issues and potential setbacks. Without this insurance, even a small disruption could devastate your company’s finances, making this coverage critical to business continuity.
Working with a provider such as Brooks, Todd & McNeil provides you with the experience and guidance you need to protect your company’s financial integrity. Whether your business sits in a region prone to hurricanes or you have concerns about cyber threats, the right Business Interruption insurance allows you to keep your employees on payroll and meet your company’s financial obligations until you get things up and running again.
Contact a Brooks, Todd & McNeil Agent Today!
Whether you’re looking for business insurance, auto insurance, or any other insurance policies (homeowners, life, health, umbrella, renters insurance, Medicare, and more!), we can help. As an independent insurance agency, we will compare policies from multiple carriers (we work with 87!) to customize an insurance program that meets your current needs, and as life circumstances change (i.e. a new home, new car, growing family, starting a business), we will assess your emerging exposures and recommend coverage to protect you accordingly. To learn more about our products and services, contact us today at (800) 448-4567.