How Does Business Interruption Coverage Really Work?

by R&I Consultants

Commercial Insurance ConsultantsOur commercial insurance consultants will tell you that having business interruption coverage is very important. In this post, we will explain why.

First, what is business interruption coverage?

Business interruption coverage reimburses insured customers for loss of income resulting directly from interruption of their businesses. Interruption can be caused by damage to or destruction of real or personal property. All must be covered in order to be reimbursed.

Second, how does business interruption coverage really work?

The insurance provider is responsible to pay for the actual loss of net income that would have been earned as well as any continuing normal operating expenses, including payroll.

Basically, business interruption coverage is like having “disability income” for your business. When a loss occurs and your business is unable to earn any or as much income as prior to the event, this coverage replaces your operating income. It is from your operating income that you are able to meet expenses of payroll, lighting, heating, phones, advertising and more.

Remember, this coverage only applies when a loss occurs to your property that is covered by the policy.

If you want to know more information about this essential coverage, just call Melissa Sheker, Senior Account Manager, at 678-384-5497. Stay tuned for more answers to our FAQs in our upcoming posts.

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