3 Ways Business Income Coverage Can Help After a Fire

11/11/2020 (Permalink)

Business fire in Acworth, GA

3 Ways Business Income Coverage Can Help After a Fire

Commercial property insurance covers physical damage to your business if there’s a fire, but until repairs are complete, your doors are likely to remain closed — and that kind of downtime can shutter a business for good. Business interruption insurance is designed to help keep that from happening. There are several ways that this type of insurance, also called “business income coverage,” can help keep you afloat.

1. Lost Income Replacement
When your business is closed for fire restoration, it’s not turning a profit, or even bringing in any income at all. Business income coverage is designed to help you replace this lost income. Lost income coverage is based upon your business’s average sales or profits when the business is open and operational. In addition to serving as a temporary replacement for your regular business income, this type of insurance also covers potential income that may be lost due to fire-damaged inventory or merchandise.

2. Operating Expense Coverage
Interruption insurance also covers many of your business's operating expenses while you're closed for repairs. Examples of covered expenses include mortgage or rent payments, taxes, payroll, and loan payments. However, some operating expenses, such as utilities, are typically excluded from most business interruption policies, so check your policy carefully.

3. Extra Expense Coverage and Other Options
Most insurance companies offer various add-on options to ensure that your business income coverage is tailored to your needs. Some options are designed to cover extra expenses, for example, if you have to open a temporary location during extensive repairs. There are also options to add additional covered events, for example, if an evacuation order were issued for Acworth, GA.
Commercial property insurance can be a major source of assistance after a disaster like a fire. However, if fire damage closes your business for a period of time, business interruption insurance can make the difference between closing for repairs and closing for good.