Business Interruption Insurance: What is Covered and is it Necessary?

Unfortunately, many small business owners are not familiar with Business Interruption Insurance. Not only are they unfamiliar with its benefits, but they don’t know whether a claim is able to be covered by their policy if the need arises.

In short, business interruption insurance covers your business in the event that you are no longer able to function normally due to a natural disaster or similar event. For example, if a hurricane damaged your office building, business interruption insurance could cover the expenses of new equipment, moving to a new facility, and any potentially lost income based on historical records. Small business owners operating in certain areas of the country will find this coverage almost a necessity, because of its broad scope and forgiving nature.

It is also important to understand exactly what is covered by the business interruption policy. Business interruption insurance is tied very closely with your property damage insurance. Anytime a property damage claim is made, if that claim is potentially causing you to lose income, you might be eligible to make a claim on your business interruption insurance as well.

For more information on business interruption insurance, visit the TechInsurance Small Business Center. Here we offer tips on how small business owners can operate their businesses more effectively and less expensively.