Understanding the Importance of Business Interruption Insurance
It is easy to overestimate the security of a business. As with individuals, business owners can tend to place their businesses in a bubble, believing them to be free of risks. Unfortunately, there is no such thing as a no-risk business. Every company needs to plan for the possibility of disaster, like fire, which is why business interruption insurance exists to protect your profitability during recovery. While commercial coverage can help fund a restoration specialist in Bountiful, UT, interruption insurance protects against financial losses in several ways.
3 Ways Interruption Insurance Protects Against Financial Losses
1. Income Loss
The primary reason to purchase interruption insurance is to limit financial losses during the fire cleaning and restoration process. The insurance takes the average profit from previous years to determine the correct value to fund the company after the business fire.
2. Operating Expenses
A company has many financial responsibilities. Business interruption insurance can help cover the expenses of payroll, taxes, moving and loan payments during the recovery process. The purpose of the policy is to ensure the continued operation of the business, which is why securing a policy is well worth the potential expense.
3. Civil Authority Shutdown
Sometimes, your business may be affected by the disaster of a nearby business. For example, if a local company had a fire, the city authority may close your business temporarily so that they can regain control over the area.
While many business owners are interested in interruption policies, especially with the current pandemic, most policies will not cover losses from viruses or bacteria.
The primary aim of business interruption insurance is to protect the company from losses due to disaster. While the COVID-19 pandemic is a disaster, it is not something most policies will protect against. If you would like more information about interruption protection, consider reaching out to your insurance agent or a disaster remediation specialist. Either party can help you understand the standard policy terms.