3 Things to Know About Business Interruption Insurance

If you own a business, it’s imperative that you have a plan in place to protect yourself and your business’s income if you’re faced with a situation you can’t control. Here are three things to know about business interruption insurance, also called business income insurance.

1. Business interruption insurance replaces income that is lost if you can’t open your business temporarily after a covered loss, like property damage. “If a car drives through the front door of your restaurant, and you need to shut down for repairs, this type of policy can help cover the lost income while you work to make repairs that allow you to re-open,” explained Nick Cronauer, attorney with Cronauer Law, LLP. “There has been a lot of recent litigation over whether business interruption insurance may also cover a civil authority, like a government-mandated closure that temporarily shuts down your company. The answer is that it’s a policy language-specific situation.”

2. If a loss forces your business to close and is covered by your policy’s language, then insurance can help cover your operating expenses. “You can recover revenue you’d normally earn if your business was operational,” said Cronauer. “In addition, you can expect your policy to make mortgage or rent payments for your business space, make loan payments, meet payroll expenses, and pay relocation costs if you have to move to a temporary location. You can also have training costs covered if employees need to learn how to use new equipment after a covered loss.”

3. Business interruption coverage generally has a restoration period during which your policy will cover lost income. “Usually, a 48- to 72-hour waiting period occurs before your policy kicks in,” added Cronauer. “It’s important to determine how much coverage you need by estimating how much time you’d need for your business to recover and noting whether your building has updated fire alarms and sprinklers.”

For more information, please contact:

Cronauer Law, LLP

1101 DeKalb Ave., Suite 2

Sycamore, IL 60178

815-895-8585

admin@Cronauerlaw.com

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