Business income insurance (also known as business interruption insurance) is a great type of insurance to have if you need to ensure that your business doesn’t fall prey to temporary business interruptions and losses. But before you sign on for a new commercial insurance plan, here are some things to ask yourself about adding business income coverage.
What Are the Risks to Your Business?
Business income insurance is necessary to have when your business is vulnerable to temporary shutdowns and interruptions. For instance, restaurants can be very vulnerable to interruptions because a bad health review may drive away customers or call for a temporary closure. You can also risk business interruption when you’re a fairly new business that has had some issues with consistent product quality. Also, all businesses with brick and mortar locations are at some risk of a temporary interruption if there is any property damage to your commercial or office space. Sit down with a commercial insurance broker and discuss whether there is a non-negligible threat of business interruption to your business.
Are You Making Stable Profits?
Another thing to think about is whether you have been making stable enough profits each year to insure. The bulk of a business insurance payout comes from lost revenue; if you’ve had spotty revenues in the past years, this can really affect the amount of insurance money you can collect in the event of a business interruption.
How Are Your Operating Costs?
Operating costs are important to consider, because many business interruption insurance policies will cover your operating costs in the interim while you’re trying to put the business back together. This may even include business needs that arise from the disaster, such as renting out a second office space during a property repair.
Can You Roll it Into Your Current Coverage?
Finally, adding business income insurance is a great idea if you can roll it into your existing commercial insurance plan. By bundling this and other business insurance coverages together with complimentary insurance carriers, you may be able to get a hefty discount from your insurance broker. Your business insurance consultant can also look at whether adding business income insurance to your current plan is a good move, or whether it adds too many redundancies to your business coverage. Making sure that you’re covered in temporary business disasters is a great way to keep the business moving forward in difficult situations.
What Are the Risks to Your Business?
Business income insurance is necessary to have when your business is vulnerable to temporary shutdowns and interruptions. For instance, restaurants can be very vulnerable to interruptions because a bad health review may drive away customers or call for a temporary closure. You can also risk business interruption when you’re a fairly new business that has had some issues with consistent product quality. Also, all businesses with brick and mortar locations are at some risk of a temporary interruption if there is any property damage to your commercial or office space. Sit down with a commercial insurance broker and discuss whether there is a non-negligible threat of business interruption to your business.
Are You Making Stable Profits?
Another thing to think about is whether you have been making stable enough profits each year to insure. The bulk of a business insurance payout comes from lost revenue; if you’ve had spotty revenues in the past years, this can really affect the amount of insurance money you can collect in the event of a business interruption.
How Are Your Operating Costs?
Operating costs are important to consider, because many business interruption insurance policies will cover your operating costs in the interim while you’re trying to put the business back together. This may even include business needs that arise from the disaster, such as renting out a second office space during a property repair.
Can You Roll it Into Your Current Coverage?
Finally, adding business income insurance is a great idea if you can roll it into your existing commercial insurance plan. By bundling this and other business insurance coverages together with complimentary insurance carriers, you may be able to get a hefty discount from your insurance broker. Your business insurance consultant can also look at whether adding business income insurance to your current plan is a good move, or whether it adds too many redundancies to your business coverage. Making sure that you’re covered in temporary business disasters is a great way to keep the business moving forward in difficult situations.
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