Your business needs to make profits if you’re going to keep your lights on, stay current on your bills, and pay your employees – that’s not a novel concept by any means. But what happens when you’re faced with an unexpected circumstance that stops your business operations in its tracks? How will you cover ongoing costs if there’s a fire in your manufacturing plant or a theft of your inventory? That’s where business interruption insurance steps in.
Even a temporary stoppage can wreak havoc on your supply chain or your operation. Swarts, Manning, and Associates wants to make sure that you are protected if things go wrong and business comes to a halt.
Business Interruption Insurance 101
Most business owners would agree that commercial property insurance is an absolutely essential form of coverage – and they’d be right. Many of them also believe that coverage would be enough to help them get back on their feet if a covered event forced them to close their doors temporarily – and they’d be wrong.
There’s an often-overlooked gap between what commercial property insurance covers and what a business would need after a fire, for example. Sure, property insurance would provide the financial backing to rebuild the structure and/or replace the necessary equipment, inventory, etc. – but, generally speaking, the coverage ends there, with the physical losses.
Business interruption insurance is generally an addition to your commercial property insurance or, more commonly, a coverage that’s included in your business owners policy or commercial package policy. It steps in where property insurance leaves off – helping you cover the mortgage, incoming invoices, payroll, etc. It also can help pay operating expenses if you’re forced to move to a temporary location while your business is being rebuilt or repaired.
Here’s a basic breakdown of what may be covered:
- Profits – reimbursement of the profits you would have earned if the covered event didn’t happen, based on your financial records.
- Fixed Costs – such as utility bills, insurance policy costs, taxes, and other operating expenses that will continue despite being unable to operate normally.
- Temporary Location – the costs associated with moving to a temporary location and getting the business operational there.
- Training Costs – retraining employees on new equipment and systems (if the replacement equipment is different than what was used prior to the event).
- Employee Wages – to help make payroll while the business is closed, so you don’t lose your valuable employees.
- Loan Payments – support for staying current on mortgage payments and other monthly loan expenses that will continue regardless of whether you’re making profits or not.
Are You Covered? Let’s Talk About Your Unique Needs.
At Swarts, Manning & Associates, we provide a unique perspective on all of your commercial coverage options, and we help to determine which carrier best fits your business needs. We strive to find you the broadest coverage at the best available rate. Give us a call to get started: (833) 878-2820.
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