Can your business survive after a disaster without Business Income Insurance?

Weather_symbolsEarthquakes, Tropical Storms, Snowmageddon, oh my! The NoVa area has really gotten a taste of all Mother Nature can create. According to a recent survey from global insurer Allianz, the annual number of natural disasters has risen from 400 major incidents in a typical year to more that 600. Now may be a good time for business owners to consider Business Income Insurance.

Allison Dorst, owner of three ecommerce websites selling sportswear, shared with entrepreneur.com that she was reimbursed $10,000 in storage and relocation costs after a snowstorm in 2011 caused a week-long power failure and the melting snow jeopardized $50,000 of inventory stored in her basement. The next year Superstorm Sandy cut power off for an extended period of time, shutting down customer service lines and causing sales to evaporate. Luckily, her Business Income Insurance reimbursed the profit Allison Dorst lost because of those missed sales.

Business Income Insurance covers the loss of income that a business suffers after a disaster. This type of policy differs from property insurance. Property insurance only covers the physical damage done to a business structure, while Business Income Insurance covers the profits that would have been earned. Business Income coverage is not sold separately, it is added to a property insurance policy.

Business Income Coverage could be vital to the survival of a company. The following are generally covered under a Business Income Coverage policy:

Profits: Covers the revenue that you would earn based on financial records had the disaster not occurred

Fixed Costs: Operating expenses, like rent or electricity still being incurred by the property even though business activities have come to a temporary halt

Extra Expenses: Reimbursement for reasonable expenses that allow the business to continue to operate while the property is being repaired

Civil Authority: Government-mandated closure of a business due to street closures or issued curfews

After a major disaster, it usually takes more time to get back on track than what business owners anticipate. Investing in a Business Income Insurance policy will ensure that your business, profits and employees are adequately covered. To learn more or add this policy to your property insurance policy, visit: http://www.mcleaninsurance.com or call 703.790.5770.

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Posted in Builders Risk Insurance, Business Asset Protection, Business Liability Coverage

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