If something happens to your business, are you protected from a financial catastrophe through business interruption insurance?
Do you know?
It’s okay if you don’t know at this point.
Because if you don’t know, that means you haven’t needed it…yet.
But you better find out.
What is Business Interruption Insurance?
Business interruption insurance is an insurance coverage that protects your business from a loss of income.
So if a tree falls on your business and you can’t operate your business, this insurance covers your lost income.
What Business Interruption Insurance Will Do For You
The best way to make this point is tell a story I experienced.
The snow storm of 2010 hit Atlanta hard. The snow didn’t melt for a week because it didn’t get warm enough.
After all the great press we get, you should know by now we Atlantans can’t handle snow.
Well, evidently the roof of one of my buildings couldn’t handle it either.
The roof collapsed under the weight of the snow.
And as much as I tried, the owner of the restaurant didn’t agree with me when I told him to use it as a skylight and continue operating.
But he did have to close.
He lost out on income from customers.
And I lost out on rent he couldn’t pay.
Fortunately, this story has a happy ending.
Both of us had business interruption insurance.
So we fixed the roof, got him open and filed an insurance claim with our insurance carriers.
The insurance carriers cut us checks our lost revenues.
They did hold back 72 hours of revenue from each of us because that was our deductible.
But that is normal.
If we didn’t have business interruption insurance we would have lost a lot of money.
What Business Interruption Insurance Will Not Do For You
Unless you live under a bridge, you know about the I-85 Bridge.
Well you might know about it even if you live under a bridge.
Okay, okay, that was a bad joke.
Back to my point.
You immediately think that business interruption insurance would protect you in this case.
And your probably wrong.
Unless the I-85 bridge was the only access to your business, you are not covered.
In other words, the event that triggers your business interruption insurance coverage has to directly impact your business.
If people don’t come to your business because it’s more inconvenient, you’re screwed.
But despite its limitations, it’s still a good idea to have business interruption insurance.
Where Can You Get Business Interruption Insurance?
That’s a good question.
Your current insurance broker should be able to get it for you.
If he can’t, it’s time for a new broker.
As a matter of fact, if he didn’t advise you to get this insurance, it’s time for a new broker.
I would do a Google search for a local insurance broker in your area.
Meet with a few of them and go with the one that is the smartest.
Don’t go with the cheapest.
You’ll regret that decision.
Business interruption insurance isn’t fun to talk about.
It’s also not fun to type about.
I did it because it’s important and I want you to be aware of it.
So do yourself and your business a favor and ask your insurance broker about business interruption insurance.
Did you talk with your insurance broker about business interruption insurance?
If so, let me know how it went in the comments below.
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