Business Insurance Policy
Also referred to as business interruption, the policy covers your business in case of physical damage and property damage. It is a policy intended for business owners rather than individuals.
If your business is affected by fire, and it causes the company to completely or partially cease, it may lead to massive financial losses that will affect your business revenue.
Any loss suffered during the interrupted period is payable under the business interruption policy.
In some cases, the business interruption policy covers civil authority. For example, if road closure is due to repairs that have affected your business operations, the policy covers the loss incurred during that period.
Cost of Business Interruption Coverage
The average monthly price of the policy depends on the location, revenue, etc.
The amount covered is based on the business financial records since it is difficult to come up with a specific amount. Business Insurance coverage specifies the period the coverage will be valid. It also has a limit, and should your business interruption costs exceed the limit of the coverage, then you will pay out of pocket.
What Business Insurance Covers
Generally, business insurance covers profits that you would have earned, costs incurred at the property, and some will cover relocation to a temporary location. Other expenses covered by the policy include
- Revenue- the amount your business makes normally
- Rent or mortgage
- Loans that you are currently paying
- Taxes paid for the business. It could be monthly or quarterly
- Payroll for the employees
- Training cost in the case where the equipment has been replaced
Causes of Business Interruption
- Cyber attack
- Civil unrest
What is the Business Interruption Policy Restoration period?
The insurance policy only covers your lost income during the restoration period of your business. It includes the time of repair, rebuilding, and replacing damaged property. Generally, the policy kicks when the damage occurs until the business is restored within a reasonable time.
Minimum Business Insurance policy
Any business should have the following policies in line with the business policy.
General Liability Insurance
Protects against claims of libel and slander. It steps in to pay for medical bills if a customer slips and falls, getting injured in your store.
It will protect your business in case of property damage or bodily injury.
Commercial Property insurance
Covers damage to property and its contents caused by fire, storm, or vandalism. It includes business signage, furniture, or inventory. The policy will help to replace the damaged equipment.
Workers compensation insurance
It covers employees in case of a work-related injury or illness. It covers loss of income, medical expenses, and in the event of death, it covers funeral expenses.
What happens when my business Interruption Policy expires during restoration?
As long as your business’s damage occurred while your policy was valid, it continues to be valid during the time of restoration. However, your insurer is not obligated to pay for any expenses that are higher than they claim.