Business interruption insurance crucial in times of crisis
There’s one main point about the importance of business interruption insurance: Without it, business owners are risking everything.
“I’ve seen restaurants that were smoke damaged, for example, and the actual harm from the smoke was minor compared to the financial loss from the number of days the business was closed for repairs,” said agent Skip Grossnickle of the Insurance Group. “It can make or break a business. It’s not to be taken lightly.”
Also known as loss-of-income insurance, business interruption insurance is used to protect against property loss in cases such as fire, tornadoes, vandalism and weight of ice and snow. Most times, it is written into the main insurance policy, but agents recommend that business owners take the time to get clear about the definitions and parameters of coverage.
This year alone, harsh Missouri weather has given business owners plenty of reason to make sure they’re covered with the appropriate plans. The cities of Joplin, Sedalia and St. Louis all became topics of national discussion as monster tornadoes left hundreds of business owners lost and wondering about their financial futures.
Agent Ruth Stone of Naught-Naught Insurance gave the classic situation: “Say you operate a clothing store, and a tornado comes along and takes it out. Not only have you lost your merchandise, your inventory, your racks and shelving, your records and who knows what else, but now you’ve got ongoing expenses. You have to pay the bank, there are taxes, and sometimes there’s an unemployment tax if you had employees. Now you have a loss of income that would have covered those expenses. … This is where loss of income comes in.”
Although her example is simple, the coverage itself can become complex. Payments are based on averages from past financial records and vary depending on the type of business and the damages incurred. Prudent financial research and paperwork before disaster strikes are key to making sure the plan is beneficial.
Allstate insurance agent Lynn Wobig strongly encourages every business owner to hold loss-of-income insurance. Owning a business without it is too risky in today’s economic environment.
Plus, Wobig said, the coverage is easily affordable for most businesses. Finding money for a monthly payment could be the deciding factor in whether a business continues to prosper or perish in a crisis situation.
“We don’t plan for catastrophes, but every business owner owes it to themselves to prepare for them,” Wobig said. “What happens if your business is leveled? How do you stay in business? I think those are some of the lessons we all took from Joplin.”
“I’ve seen restaurants that were smoke damaged, for example, and the actual harm from the smoke was minor compared to the financial loss from the number of days the business was closed for repairs,” said agent Skip Grossnickle of the Insurance Group. “It can make or break a business. It’s not to be taken lightly.”
Also known as loss-of-income insurance, business interruption insurance is used to protect against property loss in cases such as fire, tornadoes, vandalism and weight of ice and snow. Most times, it is written into the main insurance policy, but agents recommend that business owners take the time to get clear about the definitions and parameters of coverage.
This year alone, harsh Missouri weather has given business owners plenty of reason to make sure they’re covered with the appropriate plans. The cities of Joplin, Sedalia and St. Louis all became topics of national discussion as monster tornadoes left hundreds of business owners lost and wondering about their financial futures.
Agent Ruth Stone of Naught-Naught Insurance gave the classic situation: “Say you operate a clothing store, and a tornado comes along and takes it out. Not only have you lost your merchandise, your inventory, your racks and shelving, your records and who knows what else, but now you’ve got ongoing expenses. You have to pay the bank, there are taxes, and sometimes there’s an unemployment tax if you had employees. Now you have a loss of income that would have covered those expenses. … This is where loss of income comes in.”
Although her example is simple, the coverage itself can become complex. Payments are based on averages from past financial records and vary depending on the type of business and the damages incurred. Prudent financial research and paperwork before disaster strikes are key to making sure the plan is beneficial.
Allstate insurance agent Lynn Wobig strongly encourages every business owner to hold loss-of-income insurance. Owning a business without it is too risky in today’s economic environment.
Plus, Wobig said, the coverage is easily affordable for most businesses. Finding money for a monthly payment could be the deciding factor in whether a business continues to prosper or perish in a crisis situation.
“We don’t plan for catastrophes, but every business owner owes it to themselves to prepare for them,” Wobig said. “What happens if your business is leveled? How do you stay in business? I think those are some of the lessons we all took from Joplin.”
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