Why Your Company Should Consider Business Interruption Insurance

Business Interruption Insurance protects your income

You already know that you and your business should purchase certain basic types of insurance in order to protect your business from loss because of property damage or theft. However, do you know that these insurance policies usually pay for only the needed repairs or replacements after a covered event. If your business is unable to operate temporarily after one of these disasters, basic business insurance does not provide any benefits to help you make up for income you lose. To help protect you from your loss of income you need business interruption insurance.

What is Business Interruption Insurance?

Business interruption insurance is insurance that compensates your company for the income it loses if it is unable to operate temporarily because of a covered event, such as a fire. This allows you to resume your normal activities after the necessary repairs have been made without sustaining a significant financial loss.

How Does Business Interruption Insurance Work?

The specific terms of business interruption insurance policies may vary. However, in general, these policies calculate the amount of income loss you have sustained while you were not operating by reviewing your past financial records. Your sustained losses will be covered up to the limit specified by your policy while your damaged property is being repaired or replaced.

Important Considerations

As you prepare to purchase business interruption insurance, consider the following issues.

  • Business interruption insurance is part of a package.  Business interruption insurance is sold as part of a package or as an addition to property insurance. You cannot buy these policies on their own.
  • Most policies have a waiting period.  In most cases, business interruption insurance will not begin repaying your losses until 48 hours after a covered event.
  • Prices vary based on perceived risks and options chosen.  Your business interruption premium will depend on the risk of damage to your company’s premises, as well as the coverage limits and options you select.
  • Extensions of coverage are available.  Most providers offer extensions of coverage, which are additions to the policy that cover losses sustained when the business is unable to operate because of utility or service interruptions, problems with suppliers and other indirect causes.
  • California Earthquakes and other Natural Disasters makes business interruption coverage more important than ever. Living in Southern California we understand the potential impacts of an earthquake or a fire. Given the not if but when of the likelihood of the “big one” happening, protecting your business with business interruption insurance is essential. If one of these natural disasters brings your operations to a halt, business interruption insurance will help you stay on track financially while you rebuild.

Contact Pacific Unified Today

If you are interested in learning more about business interruption insurance, or if you would like to review your coverage, please contact an independent insurance agent at the Pacific Unified Insurance Agency today. As a family owned and operated full service insurance firm, Pacific Unified Insurance has been proudly helping businesses just like yours get the business insurance coverage they need in Los Angeles and the surrounding areas since 1922.


Dave Leahy (154 Posts)

Born and raised in Southern California, Dave was educated at Loyola High School and Arizona State University. After graduation, he founded two successful restaurants in Arizona, eventually selling them to move back to California. He began his insurance career working for Canadian Indemnity Insurance Company before joining Frank M. Flynn & Company in 1979. In 1985, he purchased the agency, eventually joining other local insurance agency owners to form Pacific Unified Insurance in 1992.

Filed under: Business Insurance Agent,Commercial Insurance — Dave Leahy @ 5:22 pm February 28, 2018


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