Many business owners believe their property insurance covers everything after a loss. That is a risky assumption. While property insurance helps pay to repair physical damage, it often does not replace lost income while your business is closed.
That is where business interruption coverage plays a critical role.
What business interruption coverage does
Business interruption insurance helps cover lost income and certain ongoing expenses when your operations are temporarily shut down due to a covered property loss.
This may include:
- Lost revenue
- Payroll and employee wages
- Rent or mortgage payments
- Utilities and other fixed expenses
The goal is to help your business stay financially stable while repairs are made.
Why this coverage is often missed
Many policies include business interruption coverage, but limits and terms vary widely. Some businesses carry minimal limits. Others assume it is included when it is not.
Common issues include:
- Coverage limits that are too low
- Short coverage periods that end before operations resume
- Misunderstanding what triggers coverage
A small loss can turn into a major financial problem without adequate protection.
What causes business interruptions
Business interruptions do not always involve major disasters. Common causes include:
- Fire or smoke damage
- Water damage from burst pipes
- Equipment or electrical failures
- Storm related damage
Even a short shutdown can impact cash flow, customer relationships, and employee retention.
Why regular reviews matter
Your revenue, expenses, and operations change over time. Business interruption coverage should change with them. An annual policy review helps ensure coverage reflects your current risk and recovery timeline.
The bottom line
Physical damage is only part of the loss. Lost income can be just as damaging. Business interruption insurance helps protect your business from the financial impact of downtime. Contact Professional Insurance Programs at 800-637-4676 or info@profinsprog.com.