Business Interruption Insurance: 7 Reasons Why You Need One
Do you need insurance for business interruption? The ongoing pandemic has proven that businesses should have this level of protection. However, beyond the pandemic, there are many other reasons businesses must be prepared in case of any interruption.
It's wise for business owners to prepare for such a case because every business is bound to experience one. Moreover, they seem to occur when you least expect them.
Having business interruption insurance comes in handy in such cases. It is a classification of property insurance that can payout when a commercial property can't be used, whether temporarily or permanently.
With this insurance, your company can have a financial cushion to help get it back on its feet while paying employees and covering other expenses.
Here are seven critical reasons why you need business interruption insurance for your business now:
1. Disasters and Accidents
If a disaster strikes, your business will not be able to operate, resulting in a loss of income. You can ensure that your business is protected against any unexpected loss with business interruption insurance.
The insurance policy covers the company's loss of income and expenses it incurs. At the same time, the insured business is not able to operate, such as:
Rent, mortgage payments or loss of interest
Loss of income or expected income
Property damage or destruction
Business interruption expenses and premium
2. Major Unforeseen Risks
The unexpected could quickly happen when you least expect it. It can be some significant catastrophe that degrades your business property or even an unforeseeable mishap. One good example is the worldwide economic crisis brought by pandemic lockdowns.
When a major unforeseen risk strikes, you will need the financial security that business interruption insurance offers.
Generally, business interruption insurance compensates business owners for the time and money to keep their business running after an unexpected loss. Most policies cover the first year of unexpected interruption caused by severe weather, natural disaster, business property damage, and other causes.
3. Temporary Loss of Productivity
There's a remote chance that a temporary loss of productivity could happen. This occurs when something happens to the company that makes it temporarily difficult or impossible to operate, even though the business property is not damaged. Examples of temporary loss of productivity include customer slow-down, labour dispute and strikes, and other unforeseen causes.
4. Equipment Failure
Equipment is naturally one of the most expensive investments in your business. You may buy the best and most expensive equipment to serve your customers better. Unfortunately, things don't always go as planned. Your business equipment may break down or suffer some malfunction, making you lose income. This will negatively impact the company's financial gains.
5. Legal Liability
Besides environmental risks, there’s also the matter of protecting your staff and resources. A company's legal liability covers risks that your company's general liability insurance is not insured. It can include damages from serious injuries, property damage, and other losses.
6. Dissatisfied Customers
Business owners know how important having satisfied customers is. That is why you put lots of effort into it. However, sometimes, you can't please them due to a few unsatisfied customers who file a lawsuit against the company.
7. Computer Data Loss
Even if you diligently try your hardest to protect your company's data from threats, you can't do it all time. Sometimes, a malware attack could damage your computer system. This could result in data loss, making your business suffer financial losses. This is more critical when your business has an extensive database or relies heavily on your technology.
Disasters and accidents don't happen at the best of times. They happen when they are least expected, leaving your company in financial disarray.
When you have business interruption insurance, you will have financial protection to help pay your bills while your company is out of operation.
Contact New Wave Insurance if you need insurance for business interruption. We are your insurance expert, and we can help you find the right insurance for your assets, business, and indemnity. We've helped countless others and small businesses find the right insurance for their situation. Get a free price quote by calling (07)55041999 now!