Business Income Insurance: Tailoring Your Coverage

Nearly every enterprise’s property coverage bundle includes loss of business income insurance. Designed to help your company weather an income interruption, this coverage and optional extensions can ensure that your business will survive a damaging setback.

How Does a Business Income Policy Work?

This coverage pays for business income lost due to direct physical damage of insured property. For a defined restoration period, the policy covers expenses such as payroll and restoration costs. Physical property damage triggers the payouts; business income policies do not cover losses from disease outbreaks.

How Can Your Business Extend Coverage?

An effective business income policy reflects your company’s unique risks. Coverage additions for a business income package include:

  • Contingent Business Interruption: This extension protects your business if a supplier suffers property damage matching the covered losses in your policy.
  • Extra Expense Coverage: While a basic policy pays for lost business income, it is common to incur additional expenses during the restoration period. A typical recovery expense is extra marketing to win back customers lost to a shutdown.
  • Extended Period Endorsement: The typical restoration period is 12 months. If you anticipate a lengthier recovery period, consider adding more coverage in 30-day increments.

Sizing up the vast array of income risks is a difficult task. When seeking business income insurance, look for a broker with the technology and experience to keep pace with your company’s growth.

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