If your business property is destroyed, your sales and production schedules are usually disrupted. And while your business is shut down, you lose income. The good news is, when you’re prepared, it’s a lot easier to recover.
The aim of business income (BI) insurance is to provide a business, whose operations have been interrupted by a loss, with income equal to what the firm would have earned if the loss had not occurred. Coverage begins when the direct physical damage occurs and ends on the earlier of the date that the damaged property should be repaired, rebuilt, or replaced, or at such time as stipulated in the policy. Business income insurance pays for the anticipated net income and ongoing expenses during the period of restoration. Typically, the standard BI policy limits the period of restoration to 30 days; however, this period can be extended to 12 months by endorsement.
Extra expense (EE) coverage, which expands the basic business interruption coverage can provide benefits for many businesses, especially those that can ill afford to be closed for any amount of time. Banks, newspapers and similar businesses must try to operate regardless of cost, or they risk losing their markets completely. Coverage includes expenses incurred to avoid or minimize the suspension of business and to continue operations, or minimize suspension of business if operations cannot continue. An example of EE coverage is the cost incurred by a business to temporarily lease office space while the original location is being rebuilt.
Most businesses closes their doors after at catastrophic loss not because there isn’t adequate property coverage in place, but due to the lost revenue stream for the 6-12 months typically required to rebuild the physical structure. This is where BI&EE coverage can play a vital role in protecting your business and livelihood.
To learn more about our Business Income & Extra Expense insurance products, speak with one of our experienced professionals today.
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