A Beginners Guide To Business Interruption Insurance

If the last few years have taught us anything it's that life always throws curveballs at us. Business owners need to be prepared for the unexpected and take steps to keep themselves going when they hit hard times. The good news is, you can get insurance for that.

Business interruption insurance is there to help you manage your finances and cover the money you lose while your business is closed. However, a lot of new business owners don't really know what it is or why they need it. This article will tell you everything you need to know about business interruption insurance.

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What Is Business Interruption Insurance?

Interruption insurance covers the money you lose out on when your business is closed down for some reason. If you are hit with a fire, for example, your premises insurance will cover the damage to the building, while your interruption insurance will cover the loss of earnings.

This is especially important if you depend on your business to support yourself and your family. There is no telling how long your business will be closed for and your interruption insurance will protect your finances. 

However, it's important to note that insurance companies may challenge your claim if they don't think that it's legitimate. In that situation, you may need to call some insurance claim attorneys to help you argue your case. Unfortunately, there are just some situations that will not be covered, so it's important that you check your policy carefully. 

Who Needs Business Interruption Insurance?

Business interruption insurance isn't just something that established business owners need to think about. It's also important for new businesses who don't have the cash flow to rely on if they are closed down for more than a day or two. As soon as you open your business, you need to get interruption insurance. 

That applies to all businesses, including home-based businesses. Don't assume that you won't need insurance just because you run your company from home. You are just as prone to difficulties as any other business, so it's vital that you have the right protection.

Tips For Finding The Right Policy

When you go shopping for an interruption insurance policy, there are a few things that you need to keep in mind. You don't want to end up with something that won't work when you need it the most.

Make sure your business interruption insurance covers all perils and not just specific ones. This will help ensure that anything can happen and leave you covered for any situation. 

You need to look at exclusion periods too. If your policy does include exclusion periods, then this needs to be spelled out in plain language somewhere on the certificate or proposal form. If such terms aren't clear then find another policy before you buy. It’s important to understand your policy in full before making a claim.

Be careful when changing your policy too. A lot of business owners think that if their existing insurance policy automatically buys out another one then they are covered by both policies for everything that might happen. This isn't always true and you need to check the details of what each policy covers separately because even though it may say something like “buys out most other insurance” this is usually only limited to the similar perils covered by the other policy.

Getting the right business interruption insurance is crucial, so start looking for policies right away. 

This is a contributed post.

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