Protecting Your Business From Natural Disasters

As a financial advisor to small business owners, Business Interruption (BI) Insurance is one kind of protection that I help my clients with.

In the event of a disruption, BI insurance provides coverage for income your business would have earned while closed. It may also reimburse you for expenses you were unable to pay for.
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BI insurance provides protection against a variety of common interruptions, including natural disasters, equipment damage and vandalism. However, these policies are complex, and it can be difficult for policyholders to understand what triggers coverage and how the claims process works.
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Here are 3 things to consider:

1) Physical loss or damage caused by a covered peril — In order for business interruption policies to provide coverage, there must be an actual physical loss or damage to the insured property caused by a covered peril. Coverage will not be afforded in cases where the loss was caused by a peril excluded by the policy.
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2) Business income — Business interruption policies typically cover losses in income that result from the business having to suspend operations due to a physical loss. What’s more, to be covered, the loss of business income must be the result of the necessary "suspension" of the policyholder’s operations.
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3) Period of restoration —Typically, BI policies will cover losses to business income only during a period of restoration. A typical definition of "period of restoration" is the period of time that begins immediately after the direct physical loss and ends on the earliest date the property can be repaired, rebuilt or replaced with reasonable speed and similar quality. It may also end on the date when business resumes at a new, permanent location.
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Remember, coverage will differ from policy to policy, and there may be additional considerations to keep in mind. The variances in polices underscore the importance of working with a qualified insurance broker like David Silverman CRM, CIC when purchasing or renewing your business interruption coverage, as well as filing claims.
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If you would like to learn more about BI Insurance, click Book A Meeting.