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Fire & Water - Cleanup & Restoration

Temporary Business Closure? Business Interruption Insurance Can Help

11/4/2020 (Permalink)

Hot key for business insurance BI insurance is intended for small to midsize businesses

Here's An Overview

For business owner's in Pflugerville, TX, a fire can test the resilience of the most successful commercial ventures. A business fire means temporary closure, lost income, destroyed equipment and materials, ongoing fixed expenses plus added costs like fire cleaning and restoration services. Business interruption insurance can help ease the impact of a business fire by providing a hedge against uncertain monetary losses.  

1. BI insurance underwrites common business expenses. It covers lost net income as well as mortgage, rent and lease payments, loan payments, taxes and employee payroll for a defined period of a business interruption.

2. There are exclusions. Additional insurance may be needed for non-covered outlays and circumstances. These include broken items (glass), flood and earthquake damage, utility costs, undocumented income and pandemics.

3. BI insurance is intended for small to midsize businesses. Companies with 100 or fewer employees and revenues up to $5 million are the norm. Owners can purchase a business owner's policy that combines property, liability and BI coverage, which is typically more cost-effective than buying separate policies.

4. Insurance pay out is usually limited to 30 days. Extensions of up to 360 days can further buoy up operations as a business works to recover its revenue stream. Policies usually have an initial 48-to-72-hour waiting period before reimbursement.

5. The cost of coverage varies. In general, cost depends on a business' geographic location, industry, employee count, the amount of coverage and the business' claims history.

6. Coverage is business-specific. To arrive at a ballpark estimate of adequate coverage, consider a business's gross earnings and revenue projections.
A prolonged business interruption can put pressure on a company's financial statements. BI insurance can neutralize the high cost of closure and give a business economic relief while it rebuilds. Like any insurance, BI is an investment in the future. It's worth a second look.

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