An important coverage needed by a business owner to survive an extended interruption in operations of a business due to a covered loss is business income and extra expense. Business Income coverage compensates you for lost revenue until operations resume (subject to policy deductable and limits). This is calculated by looking at your prior years of income and expense records. It is critical that you keep copies of this information away from the insured premises with your business emergency plan. Without readily available documentation, reimbursement could be delayed as there would be no basis for a settlement. Most Business Owner’s (BOP’s) Policies will pay you on an actual loss basis for a period up to 12 months, while other policies have fixed maximum reimbursement limits of compensation for those items included in the loss such as loans, taxes and ongoing operating expenses etc.
Extra Expense coverage is not discussed often enough by insurance agents. A business which depends on repeat customers such as Daycare Centers, Veterinarians, Florists, Dry Cleaners and Retail Stores can not afford to be closed an extended period of time. Their customers would be forced to take their business to a competitor and possibly not return. Extra expense coverage would enable you to open your business at another location by paying the “extra cost” so that you could continue to service and protect your customer-base during the claim period.
As always, if you have questions or feel we can be of service, call Pinnacle Group Insurance at 412-816-1000.