As a business owner, you are probably aware of the importance of insuring your building and its contents against any disaster.  But have you taken steps to insure your income?   If a tornado  or other tragedy interrupts your business operations, lack of income will be one of your greatest losses.  It is essential not to overlook the need for business income insurance, one of the most valuable insurance coverages available to your company.

A business income policy is activated when daily operation is suspended due to a covered peril, such as a storm, fire, explosion, or other disasters.  The insurance is designed to provide the income that your business would have generated under normal  circumstances, making it possible to meet fixed expenses such as rent, utilities, loan payments and payroll.

While business income policies vary, most limit coverage to an interruption caused by direct physical wreckage, by a covered peril, or to property at the insured site.  In most instances your policy  would carry extra expense coverage, in which case your insurer would also pay any expenses incurred to hasten your recovery or otherwise reduce your loss.  The Insurance Services Office (ISO) has two business income forms- one with extra expense coverage and one without.  You may also purchase extra expense coverage by itself.

Since you cannot predict when you may need to file a business income claim, the next best thing is to be prepared for it.  Knowing the proper actions to take in the wake of a catastrophe can expedite the claim process and spare you a great deal of aggravation.

Expediting a Business Income Claim
 

• The first step is to be familiar with your policy provisions.  Be sure you read your policy carefully so you are aware of your rights and obligations.

• Contact us immediately so that we can report the claim to your insurance company.  The sooner your insurer can begin investigating the loss, the more prompt the claim payment  will be.

• Put together a list of all actions necessary to resume  operations on a full or part-time basis.

• Starting on the date of the loss, maintain a separate record of subsequent operating expenses.

• Record the length of electrical power outages, saving all written notices regarding the power interruption.

• Keep track of any extra expenses incurred to expedite the return of normal business operations.

• Document your company’s evacuation instructions.

One of the most important ways to make the claim process run smoothly is to cooperate completely with your insurer.  Your recovery after a disaster will suffer if you withhold information, exaggerate claims, inflate figures or otherwise obstruct the settlement process.  To learn more about the provisions of business income insurance and how it can benefit your business, call or stop in to see us.