Every day that a business is not operational is a day that is costing the owner precious capital. There are many reasons for businesses to be closed for extended periods of time following a catastrophe, and many of those are covered under insurance. Here are four things that business interruption insurance provides during a covered loss.
In the event of a covered loss, the policy would cover the profits normally expected during the closure. This helps the business still meet some of its financial obligations despite being closed.
If owners can reasonably relocate a business temporarily, insurance will cover the expenses involved in moving or changing locations. This can help a business get back on its feet faster and start turning a profit sooner.
If the business is not operating and generating income, it cannot pay key employees. Instead of forcing those employees to find employment elsewhere to get paid, business interruption insurance can provide wages.
Fixed costs like rent, taxes, and other costs do not change based on inventory or operation but still need to be paid. In the event of a covered loss, insurance can continue funding those expenses until the company is open for business again.
Business interruption costs owners money. However, those costs can be covered with the proper insurance.