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7 Important Reasons to Get Business Income Insurance

When you own a business, you want to make sure that you have the proper insurance in place to protect it. On a basic level, insurance protection can be just liability or worker’s compensation. Yet, business income insurance is equally important to have.

Also known as business interruption insurance, business owners should invest in this coverage. If you are unfamiliar with this type of insurance and why it’s important, this article is for you. Here are 7 reasons business insurance is important.

1. Help With Lost Income

Getting business income insurance, can be beneficial for several reasons. Yet, the primary reason for business interruption insurance is to have protection from lost income if your business has to close because of an unexpected loss.

The loss can include damage done to the premises of the business by a covered peril. A loss can be considered as anything that hinders or suspends the operation of a business.

For example, say your business experiences a fire. This coverage will replace the net income you would have earned if no loss had occurred. This type of insurance also covers income loss while repairs are being made to the business.

2. Used to Cover Relocation Fees and Expenses

Business income insurance can also help if you need to relocate your business after you experienced a covered loss. This will give you the ability to set up your business at another location so you can take care of your customers.

3. Help Pay Expenses and Cover Payroll

When you are running a business, there are expenses you have to pay so you can operate efficiently. Business interruption insurance will make sure you can pay things like your rental expenses and equipment. It will also make sure you can take care of your employees by covering payroll.

4. Provides Peace of Mind

Another reason to get business income insurance is for the peace of mind it offers. As a business owner, there are so many things to worry about. Having the right protection in place can make the world of difference.

With this type of insurance, you will know that if your business experiences a covered loss your income will be protected.

5. Prevent Permanent Closure

Having business interruption insurance is going to help prevent your business from closing its doors permanently. When a business experiences a catastrophic loss, they tend to shut down for good.

This is especially true if a business is closed for over 30 days. The best way to prevent this from happening to your business is by having business interruption insurance.

6. Protect Future Income

After a covered loss, having business income insurance can help get your business back up and running. It can replace equipment and other property you need to be fully operational.

This means having coverage for your business income could protect future income as well. The reason being you will be able to open your business back up much sooner, compared to if you had to handle the loss yourself.

7. Help Rebuild After a Loss

One last reason you should get business income insurance is it’s going to help you rebuild your business after a loss. This insurance will allow you to have access to the resources needed for your business to operate after a loss. This will allow you to rebuild your business to the level it was before.

Things to Consider When Buying Business Income Insurance

There are a few things you want to consider when buying business income insurance. One consideration should be the exclusions in the policy.

This type of policy will not cover viruses such as COVID-19. There are also exclusions around flood, earthquake, or undocumented income. Other exclusions include broken items such as glass and utilities.

Another point to consider is that some business income policies extend coverage for a set amount of time after repairs are completed. You want to make sure that if you do experience a loss you have provisions in your policy that allow you to take care of it.

You also want to consider adding extra coverages to make sure your business interruption policy can meet your needs.

Adding Extra Coverages

Business interruption insurance has optional coverages that you can add with an endorsement. You can get coverage for your utilities, civil authority, and extra expense coverage.

The utility coverage would provide you with protection on your gas, water, or electricity provided by the utility company. Civil authority coverage provides coverage for your lost income if customers aren’t allowed to enter the building because of orders from civil authorities. These orders are usually a direct result of physical damage to your property.

The most common coverage period for this is 30 consecutive days. When the optional protection of extra expense coverage is added, you will have coverage for expenses that occurred during restoration.

In the event of a loss, you are responsible for taking the proper steps to reduce or prevent further damage. In doing so you may incur additional expenses. Putting this coverage into your business income insurance policy can be a big help during the rebuilding process.

Business Income Insurance You Can Trust!

With business income insurance you can be sure that you are fully protecting your investment. In case of a fire, hurricane, or other catastrophic loss, you want to make sure your business will be able to survive.

Coverage for business income can be the very thing that can save your business making sure it stays open for years to come. If you are looking to learn more about your options with business income insurance, we can help. Contact us today to learn more!