If your commercial location is hit by a fire, storm, or another covered natural disaster, your business insurance policy will pay for repairs and replace damaged assets. However, you may need to cover your expenses until you’re ready to reopen. If you don’t have a significant cash reserve, business interruption insurance can protect your investments and ensure you recover after a disaster.

What to Know About Business Interruption Insurance

What is business interruption insurance?

Interruption coverage replaces the revenue you’ll lose if your business is forced to close after a covered event. The payments can be used to pay your lease, keep employees on the payroll until repairs are completed, and pay any taxes. Some policies may also replace profits you’ve lost due to an unexpected closure.

Who needs coverage?

All small businesses are susceptible to unexpected disasters, so every entrepreneur should consider purchasing interruption coverage. Even self-employed contractors who work online can use these policies. If a disaster damages the equipment you rely on or leaves you without an internet connection for several weeks, you’ll still have the resources to cover your expenses until you’re ready to get back online.

What disasters does business interruption coverage protect against?

Interruption coverage is bundled with your other business insurance policies, which protect against a wide range of perils. Losses due to fire, rain, or storm damage are typically covered, along with criminal activity like theft and vandalism. However, floods, viruses, and other perils are usually excluded unless you have an extra endorsement on your policy.

How much coverage is necessary?

The specific amount of coverage you need depends largely on your monthly expenses and how much revenue you can potentially lose. Because repairing a building or replacing valuable equipment can take time, you should carry enough coverage to replace your income for several months.

As Rochester’s most trusted independent insurance agency, Consolidated Agency Inc. provides valuable coverage to business owners throughout Monroe County, NY. Since 1988, they have delivered exceptional service, taking the time to understand each client’s needs and comparing policies from a variety of industry-leading carriers. Their agents will help you determine how much interruption coverage you need to protect your business from the unexpected. Visit their website for more information on their business insurance services, follow their Facebook for updates and tips, or call (585) 467-4110 to request a quote.