A sudden interruption in operations could land your small business in hot water. You could in fact be forced to temporarily close down your business due to an unforeseen event which can be costly and may put a strain on your business, especially if you are unable to generate regular income to pay bills and cover repair costs.
Unfortunately, many businesses struggle to get back on their feet after emergencies. What can you do to keep your business alive when you are faced with an unexpected disaster? That is where business interruption insurance comes in. Having a business interruption insurance could help cover your bills and other expenses in the absence of business income following a disaster, keeping you in business during the interruption of your activities.
What is business interruption insurance?
Business interruption insurance is designed specifically to help you offset your loss of income and pay your fixed operating expenses if your business temporarily cease operations due to an insured loss.
5 Reasons Why Your Business Needs Business Interruption Insurance
Every business owner should consider purchasing business interruption insurance. Disasters can take many forms and jeopardize your activities at any time. It takes time to repair damaged assets, and during that time, you still need to think about recurring operating costs. This can be a source of stress for owners like you, especially if your business is not generating income. Business interruption insurance could help free your mind. Here are 5 reasons why you need business interruption insurance.
1. Protection Against Revenue Loss
Insurance can serve as a financial safety net for your business in an event of an unforeseen circumstances or a disaster. It can also take care of recurring expenses like rent, utilities, loan repayment, payroll, etc., without pushing you into financial stress
2. Continuity of Operations
Insurance can hasten the gap between business disruption and business recovery. For instance, if an emergency hit your business and you are force to close down your business for a while; insurance can provide temporary support funds measures that will help keep you in business till you are strong enough to shoulder your brand responsibilities.
3. Peace of Mind
Running a business can be very stressful and the thought of business misfortune or unexpected business interruption can weigh down a business owner physically, financially and emotionally. Handing over this thought of business interruption to your insurance provider can give you the peace of mind that will inspire you to stay focus and grow your business.
4. Reputation Protection
As a business owner, closing down your business for too long can tarnish your brand reputation and make you to lose customer’s trust. An insurance cushion any effect of unforeseen circumstances and helps you gets back in business as soon as possible.
5. Long-Term Resilience
From supporting your business in proactive risk management measures to disaster preparedness.; an insurance plan can provide your business with a contingency plan that will inspire a long-term resilience of your brand.
What types of expenses can business interruption insurance help me pay?
If you have to interrupt your activities due to an insured loss, here are some expenses that insurance can help you:
- Rent
- Electricity, and other utilities
- Wages
- Other costs (alarm system, property tax, etc.)
- It could also cover part of the costs incurred to relocate your business if the costs of repairing the current building are too high.
Final Thoughts on Business Interruption Insurance
In conclusion, protecting your business with business interruption insurance can save you a lot of stress. You don’t always control the fate of your business. But you can choose to prepare well. And getting the right insurance can make a big difference.
