Coverage for Business Interruption

What is business interruption insurance?

Business interruption insurance is designed to protect the earning power of your business. It provides coverage when your business operations are unexpectedly halted due to a variety of reasons. (Business interruption coverage is also known as earnings insurance, earnings coverage, profits insurance, rental income insurance or income insurance.)

Scenarios:

• A fire rips through your office complex
• your $100,000 computer-assisted-design system (CADD) is stolen
• a roof leak damages your inventory
• a space you rent to others experiences water or fire damage

True, while your property/casualty insurance covers the cost of repairing the building or equipment damage, how do you recover and maintain your business income in the meantime? Business Interruption insurance is the key to getting your business up and running again—fast.

Typical Income Losses and Expenses

The effects of a business interruption can be far reaching. For example, should the business remain closed for some time, you could be faced with a significant financial loss along with other challenges, such as:

• Loss of income, while your operating expenses continue to mount
• Reduced earning capacity
• Increased vulnerability to competition
• Financial strain that slows or prohibits recovery or re-opening of your business
• Temporary or permanent loss of customers
• Loss of key employees

Therefore, business interruption insurance coverage can provide reimbursement for salaries, rent, taxes, and other expenses, as well as projected profits that would have been earned during the time that your business remains inoperable. Depending upon your coverage, it can also help you pay for the costs involved in establishing temporary premises or paying employee overtime.

The coverage you need depends on the type of business you run. Talk to your insurance broker to get the right coverage for your unique business.

Common Business Interruptions

Your production line, your offices, and the services you provide could suffer from unpredictable disruptions, such as:

• Electrical blackouts and extended power outages
• Fire, flood or some other natural disaster at your business
• Access is denied to your business due to fire or other damages at neighbouring businesses
• Damage, destruction or loss of new designs, production patterns or models, such as at trade exhibits or while in transit
• Loss of production in your business due to business interruption at one of your key suppliers

key considerations

• Can you run your business from another location?
• Do you own the building? How long could it take to rebuild it?
• Will your customers/clients return when your business reopens?
• What expenses will continue while your business is closed?
• Are there any key employees that you cannot afford to lose if your business is closed for an extended period of time?
• Is there any equipment that may take an extended period of time to replace?
• How long will it take for your business to return to profitability after it reopens?

Get Park Insurance Working For You

Call or email our business insurance experts today. We’ll work with you to be sure you get the unique coverage you need for your business!

Call:  604-659-3130

Email: info@parkinsurance.ca