Do I Need Business Interruption Insurance? What Does Business Interruption Insurance Cover?

There are many different coverages in commercial insurance and business interruption insurance is one coverage that can often be overlooked. What is business interruption insurance? What does business interruption insurance cover? Do you actually need business interruption insurance, or is it something you can just forego? The short answer is you need business interruption insurance! In the event of a direct damage insurance claim that results in your business not being able to operate, business interruption insurance provides coverage for loss of income and associated expenses incurred to resume operations.

What, exactly, does business interruption insurance cover?

Business interruption insurance, like most kinds of insurance, varies based on your needs. The main forms of business interruption insurance are:

  • Earning
  • Profits
  • Rental Income
  • Extra Expenses

These could also include costs associated with new training that becomes necessary due to the closure/repairs, and the costs associated with opening temporary locations while your existing premises is being repaired.

Earnings

One common form of Business Interruption coverage is Gross Earnings insurance. This type of coverage insures the loss of revenue and the continuing expenses resulting from direct damage to your business property.  The insurer will continue to pay until operations resume, subject to the limit of insurance and the period of indemnity.

Profits

This type of business interruption insurance provides coverage for the loss of revenue and continuing expenses resulting from direct damage to your insured property. Profits coverage continues from your insurer until your business returns to the pre-loss level of profit, subject to the limit of insurance and the period of indemnity. This is a broader form of coverage than Earnings. Coverage can be tailored to increase the length of the period of indemnity as well as respond to seasonal fluctuations (peak season).

Rental Income

Rental Income coverages responds to the loss in revenue directly from what you would be earning in rent payments. If you own property that you rent or lease, and that property is damaged such that it cannot be tenant occupied, Loss of Rental Income coverage will replace the lost income you would otherwise receive from tenants.

Extra Expenses

This insurance protection covers the reasonable expenses you may incur from having to operate from a temporary location while you cannot operate from your normal location. This could be in the form of leasing temporary space, re-routing phone lines or purchasing laptops to send your employees to work from home while your space is being repaired.

Fixed Costs

Fixed costs protection covers the expenses that are still being incurred by the property, including operating expenses. This is based on your historical overhead costs. Costs like rent payments, leases on equipment, subscriptions to digital platforms that you need to use for your business, etc.

Plans for business interruption insurance can be customized for your business’ unique needs. Our commercial insurance brokers will be able to you with the proper coverage based on your needs that will give you peace of mind should something were to happen to cause your business to shut down. We will also help you understand what your policy covers, and what is and is not included as part of your policy.

Talk to a commercial insurance broker at Sadler Insurance today to learn how we can create a customized business interruption insurance plan for your business!

What Does Commercial Property Insurance Cover?

Understanding your commercial property insurance can be tricky, and you may find yourself asking what does commercial property insurance really cover? Commercial property insurance can be modified to fit your needs, every policy is different. It’s important to know the basics of commercial property insurance, so you can determine what your needs are and what changes you need to make to give you peace of mind. 

What Is Protected

Commercial property insurance protects your place of business from many things. It provides protection from fire, flooding, water damage, theft, vandalism, to name a few. There’s always a risk for these kinds of property damage to occur, and without a comprehensive insurance policy, damage from fire or flood could completely derail your business. Protection from theft comes from many different sources today. It is no longer just a physical loss from outside sources or theft from an employee. Todays’ business owner is also exposed to theft from cyber sources. Does your policy protect from cyber losses?

Your commercial property insurance can also protect your business from occurrences such as equipment breakdowns (such as forklifts, freezers or computers).

Commercial property insurance policies can also cover business interruption losses. If you have to close down for several weeks or months due to damage from a fire or flood, business interruption insurance will cover the lost revenue so you don’t have to worry about covering those continuing expenses.

What Isn’t Protected

All insurance policies have limitations and exclusions. Some types of losses are not covered. The nature of how the loss or damage occurred may not be covered. You will often see that insurance policies have limitations, such as “cash up to $5,000”. This means that if you had $6,000 in cash that was destroyed, you would only receive $5,000 back as part of your insurance coverage. It’s important to know what your policy covers and what the limitations are, so you can protect yourself fully. 

Commercial property insurance can be easily modified to fit your business’ unique needs. Talk to one of our experienced commercial insurance brokers to start planning your specialized commercial insurance policy, today!

Your Trusted Edmonton Commercial Insurance Brokers

Sadler Insurance is your trusted, locally-owned Edmonton insurance broker, proudly serving Edmonton for over 80+ years. Learn more about our Auto Insurance policies or get a quick  & easy quote on auto insurance today!

Important Notice Concerning COVID-19

During these unprecedented times and the global concerns with COVID-19, Sadler Insurance is doing its part in taking precautionary measures to protect the health of our staff and clients.

Effective August 3rd, 2021. We are seeing clients by Appointment Only

We still encourage our clients to conduct their transactions with us over the phone and via email as much as possible. However if you prefer to meet with your broker in person, please call our office to set up and appointment.

Please contact our office at (587) 805-0087or by email at sadlerin@sadlerin.com.

Thank you for your understanding.