Does Your Business Have Sufficient Interruption Coverage?

12/30/2019 (Permalink)

Does your business have sufficient interruption coverage?

Does Your Business Have Sufficient Interruption Coverage?

Even a short interruption in operations can end up costing a business thousands of dollars. If you own a business, you should maintain interruption insurance coverage in addition to a property insurance policy. These three measures can help you determine whether your current level of coverage is sufficient to offset lost revenue during fire restoration at a commercial building in Gilberts, IL.

Calculate Profits and Losses

If your business suffers major damage due to fire or secondary issues related to smoke or water that necessitate the suspension of daily operations, you could lose all incoming revenue. Use statements of income and expenses to determine the duration of closure that could reasonably be offset by your current level of coverage.

Factor In Continuing Expenses

Interruption insurance is useful for covering continuing expenses such as payroll or lease payments. Assess your coverage by calculating an average monthly budget that accounts for these recurring debits. It is also a good idea to review the terms of contracts with customers and suppliers to check for any penalties that could accrue in the event of an interruption.

Include Production Information

Don’t forget to account for production costs when making interruption calculations. This includes costs associated with damaged equipment, supplies, inventory and other essential materials. While a property insurance policy should cover the cost of losses, these items may also be factored into a business interruption claim.
You should carefully review all terms and limits when taking out an interruption insurance policy. Each of these considerations can help you arrive at a more informed estimation of the level of coverage you may need and easily gather important materials for making a claim. Store all of these original records or copies at an off-site location to ensure that you can access the information you need in the event of an emergency at a business in Gilberts, IL.