Minimize Business Interruptions: Understand Your Insurance Coverage

        Six Steps to Minimize Business Interruptions


Step 3:

The next step would be to review your insurance coverage. Business interruption insurance generally comes into effect in the case of one of three circumstances:

     • Physical damage to the premises that cause suspended operations.

     • Damage to property that is covered by the insurance policy and
     prevents customers or employees from accessing the business.

     • The government closes an area due to property damage that is
     covered by the insurance policy and prevents the customers or employees
     from accessing the business.

Since business interruption coverage can differ significantly, it is important to understand the policy terms, such as exclusions, coverage limits and waiting periods. Coverage is provided for lost net income only for the duration of regaining operation.

According to the Federal Emergency Management Agency, 40 percent of businesses never reopen after a disaster. Implementing steps to prepare for and respond to disasters can help to reduce loss. In order to protect your business from unavoidable interruptions, it is recommended that you have a plan in place.