Are Business Interruptions Included in Business Insurance?

Your business’s risk management and loss control measures must account for many possible scenarios. Regardless of sector, size or safety precautions, accidents, errors and other incidents can disrupt your operations and lead to significant financial losses. Among these risks, interruptions to your company’s typical functions can be particularly costly, potentially jeopardizing your financial stability and long-term goals. Fortunately, a well-designed business insurance package can help safeguard against these challenges.

What is Business Interruption Insurance?

Business interruption insurance should be a top priority as a critical component of many companies’ overall insurance portfolio. Your business insurance, also known as commercial insurance, typically refers not to a single policy but rather a collection of coverages tailored to account for relevant risks and exposures. Business interruption insurance is designed to provide financial support when your operations are disrupted by covered incidents, such as fires, storms or other insured events.

It helps cover lost revenue and other expenses, ensuring your business can recover more smoothly from unexpected setbacks.

How Can My Coverage Assist Following Interruptions?

If your company experiences an operational disruption, it can have dire consequences for your financial stability and future growth. Even short interruptions could have far-reaching ramifications, as unbudgeted expenses could push previous goals out of reach. Fortunately, the right business interruption insurance can cushion these situations by assisting with the following:

• Lost revenue

• Rent and mortgage payments

• Taxes

• Employee wages

• Loan payments

• Temporary relocation costs

• Training expenses for new or temporary employees

It’s important to note that most business interruption insurance policies include a waiting period before coverage begins (e.g., 48–72 hours) and typically have a maximum indemnity period, often capped at 12 months.

How to Include Coverage in Your Business Insurance

Your company may have several ways to approach its business interruption coverage needs. Specifically, this type of insurance may be available via the following:

• As a standalone business interruption insurance policy

• As a commercial property insurance endorsement

• As part of a business owners policy (BOP)

We’re Here to Help

Contact Craddock Insurance Services today to learn more about business interruption insurance and other coverage solutions for your company.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.