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Fire & Water - Cleanup & Restoration

What Does Business Interruption Insurance Cover?

7/2/2020 (Permalink)

Financial concept meaning Business Interruption Insurance with sign on the piece of paper. There are many incidents that could lead to business interruption

A fire in your commercial building in Beaumont, CA, can cause extensive damage. You may not even be able to continue business as usual until the damage is repaired. When this happens, it's useful to have business interruption insurance to cover the costs to keep you on your feet.

Operating Expenses

Entrepreneurs know how to be flexible and adapt to new circumstances. No matter how seamlessly you change your business model to accommodate for the temporary loss of your facilities after a business fire, however, it is likely that you won't see as much cash flow as you're used to. Unfortunately, the costs associated with operation don't go away:

  • Payroll
  • Taxes
  • Loan payments
  • Monthly bills
  • Temporary location

Your interruption policy can help cover these costs. Talk to your provider about the specific exemptions for your particular policy.

Lost Income
Business interruption insurance may also cover the income you lose while fire cleaning experts are working on your building. The amount your policy covers depends on a combination of previous and projected earnings. Using recent profit and loss statements, your provider estimates how much you would have earned if you were able to operate your business as usual during the down time. The policy is designed to protect that income so that you don't get behind or have to shut down completely.

Government Shutdown
If a pandemic or some other widespread disaster happens, the government may decide that all non-essential businesses must close for a certain period of time. During these events, your interruption policy should cover the same things it would cover if your building was damaged or destroyed. A shutdown that is out of your control doesn't have to put your business in jeopardy if you have the right insurance coverage.
There are many incidents that could lead to business interruption. It just makes sense to have a policy in place to cover the money you lose because of it.

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