Business Interruption Insurance Coverage
Business interruption insurance is an extremely important form of insurance that covers not only the financial loss of a business, but also the disruption of its functioning afterwards. This is needed by all types of businesses whether big or small, medium or small and everywhere in between. The income lost covered can be because of the natural disaster-related sudden closing of the business establishment or because of the reconstruction process following a natural disaster. Whatever your business is, having this coverage will definitely make your life much easier as you know you are protected against all kinds of losses.
What does business interruption insurance coverage really mean? It means that whatever happens to your business, no matter how minor the damage or disaster, you have coverage. No matter how damaged the building is, no matter what loss occurs in the office or in the warehouse, you are covered. The main thing to remember is that the damage must be in direct physical loss. In other words, the damaged property cannot be replaced and the business has to cease operations in order to pay for the damage.
The list of direct physical damage covered by your policy may vary depending on your contract with the insurer. Other things included in the list of damages covered by your business interruption insurance are perishable supplies, fixed assets, inventory, parts and finished goods. In case you have a special agreement with the civil authority, it may include additional items as well. Make sure to discuss with the insurance agent the kind of agreement you have with the civil authority so that you are both clear about what is covered and what is not.