Business Interruption Insurance San Diego

What Is Business Interruption Insurance?

Being in charge of a company can be rather difficult if you do not have the right insurance. Disastrous natural events, such as a fire, winds, a hurricane, or hail, can sometimes force a business to cease operations and shut down temporarily. Business interruption insurance, or business income insurance, is one of the coverages that most companies should carry. The main purpose of this policy is to help you transition and overcome hardships caused by unfavorable events.

Business interruption insurance can help compensate for:

• lost income (that would have been earned)
• daily operating costs (relocation expenses, payroll, rent, etc.)

Almost any business can benefit from this policy as it protects against financial damage, which can sometimes be catastrophic. Without this insurance, grocery stores, clothing shops, hotels, restaurants, law firms, and other businesses with high cash flow would experience unfortunate consequences. For instance, if the roof becomes damaged due to a tree fall, and you have to close the business for the repairs, this policy can help pay for the revenue while the roof is being repaired. Or, if you have lost revenue due to a local authority road closure or city curfew, business income insurance may compensate for the damage.

Note that business interruption insurance is included in Business Owner’s Policy (BOP) along with commercial property insurance or general liability.

Business Interruption Coverage Provided by H&M Insurance Agency

What is Included in Business Income Insurance?

There are certain areas that are not covered, so let’s take a closer look below.

How Much Business Interruption Insurance Coverage Do I Need?

In insurance, limits on the policy serve to determine what the maximum dollar amount is that the insurer is obligated to pay out for claims. Every business continuity policy has a coverage limit, and it can sometimes be challenging to decide the maximum amount of the coverage.

At H&M, we recommend to take into consideration gross earnings to be able to make a profit estimate. This should help you identify the right coverage limit amount. Please note that any amounts that are larger than the coverage limit will have to be paid by you.

To decide how much coverage your business needs, think of the following:

• Gross income and inflation
• Length of time it would take to recover
• Employee costs
• Whether fire alarms, smoke detectors, and sprinklers are in full operating condition and up to date
• What the rent would be for a temporary relocation or moving

How Long Is The Restoration Period?

Typically, your policy will have a “restoration period”, which is the length of time the policy compensate for lost income. It usually lasts up to a year, with a 48 to 72 hour waiting period before the policy is activated. Check the details of your coverage to find out how long the restoration period lasts in your case. Furthermore, do not forget to renovate and rebuild in a timely manner, to make sure you will be reimbursed and to avoid unfortunate consequences.

Which Businesses & Industries Can Benefit From Business Interruption Policy?

How Much Does It Cost ?

The cost of business continuity insurance depends on numerous factors like industry type, the number of employees, coverage limit, and so on. Furthermore, the location of your company can also be a determining factor. Typically, if you are located in a higher risk area (winds, or wildfires for instance), you will have to pay higher insurance premiums than businesses located outside of these zones.

Why Choose H&M Insurance Agency?

Harriett & Mijailovic is San Diego’s leading independent insurance agency, specializing in providing insurance coverage for a wide range of industries. Our mission is to work diligently to enable small businesses to choose and carry the most suitable insurance coverage for maximum protection and peace of mind.