Business owners policies, or BOPs, contain several critical elements of business insurance. Among these you will likely find business interruption insurance. It is among the most important elements of protection a business needs. If you don’t fully understand this coverage, you might not be able to use it to your advantage. Let’s explore the topic a little more closely.
If you decide to invest in a BOP, ask if it will include business interruption protection. Chances are, it will, but don’t let the opportunity for coverage pass you by.
What Is Interruption Insurance? 
Let’s say that one day a severe storm damages your storefront. It might break out windows, put holes in the roof and cause structural damage. When the storm passes, you are going to need to take time to repair the business. In many cases, you won’t be able to operate while making these repairs. That can hurt you financially if you don’t have protection.
Your BOP likely has property coverage. That will help you pay for the repairs to your business following a loss. However, property coverage alone won’t cover the money you lose simply through lack of operations. After all, you’ll need time to repair the business, and time equals money. Therefore, you stand to lose out financially during this closure. If you don’t have appropriate insurance protection for this risk, you might even sustain irreparable losses.
Don’t let this situation happen to you. With business interruption coverage, you’ll protect your business in cases like these. If a covered event causes a temporary closure in the business, you won’t lose out financially in the meantime. This coverage will help supplement your costs and expenses incurred during the closure. It might help you pay for:
- The expenses of temporarily relocating the business
- Back expenses, such as employee salaries or vendor fees
- An estimated profit that you might have earned had you been able to operate
In any case, you’ll get a financial cushion during a time of significant loss potential. When you can’t operate, you should not have to worry where the money will go in the meantime. Instead, let business interruption coverage serve as a cushion to put your mind at ease.
The good news is most BOPs will automatically include interruption coverage. Nevertheless, it doesn’t hurt to ask your agent to explain to you the details of your policy options. Most policies won’t cover every interruption expense. They will also have limits on what you can receive in compensation. Therefore, it’s a good idea to work closely with your agent to determine the right amount of coverage.