What is Business Interruption Insurance
What is business interruption insurance? The BI is an insurance that covers for the income loss of a business as a result of a loss covered.
This is also called business income, time element, loss of profits, or occupancy and use coverage.
Business interruption provides insurance when a business cannot function as a result of covered loss. The business interruption insurance covers the expenses of the continued operation of the business, and the profits or losses that the business would have been earned if there had never been a loss. The coverage starts from the time when the business suffers from loss and until when the business is running and back in its state before the loss takes place.
If the location of your business is damaged as the result of the covered loss and you decided to operate at another location temporarily, then you may need to purchase extra expenses coverage. This extra expense will cover the costs beyond the normal operation of your business to be able to continue your operation at the temporary location. For the protection of your business, you may want to buy both these insurance coverage.
If the interruption of your business is due to the loss of your supplier then you may need to buy the contingent business interruption insurance. This will provide you the coverage needed when you need to suspend the operation of your business temporarily.
Business Interruption Insurance Cost
So, how can you determine the amount you need for the insurance? You just simply need to complete the so called business interruption worksheet and have your accountant help you if necessary so that you can ensure that you are buying the right amount of insurance coverage that is suited in your business. With your paper and pen complete filling up the BI worksheet or if you are more comfortable filling the computer forms then you can get the automated business interruption worksheet and complete it up.
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