Business Interruption Insurance

Do You Really Need Business Interruption Insurance?

What is Business Interruption Insurance?

Business interruption insurance (also known as business income insurance) is a type of commercial insurance that protects a business’s income in the event the business has to shut down for a set amount of time due to restoration. 

How Does Business Interruption Insurance Work?

Business interruption insurance can be purchased in conjunction with commercial property insurance, but it does not cover the damage that is done to a property. Instead, business interruption insurance protects business owners from losing out on revenue during the time that the property is shut down in order for necessary repairs and renovations to be made. Many of the perils that can shut a business down include: 

  • Theft and vandalism 
  • Fire 
  • Storm damage 
  • Falling trees and debris 
  • Lightning 

If a business’s building or necessary equipment that is covered under the plan is damaged, rendering them unable to service customers for a period of time, business interruption insurance may reimburse business owners for lost income and a variety of other operating expenses, including: 

  • Mortage, rent, lease payments 
  • Taxes 
  • Payroll 
  • Loans 
  • Costs associated with relocating 

Income-based reimbursements can generally be calculated using the pre-loss earnings of the business. 

Business interruption insurance generally does not cover items broken due to employee accidents, flood and earthquake damage, and the shutting off of utilities (i.e., loss of power, etc.). 

Who Needs Business Interruption Insurance?

Any business that has a physical location (either retail or a business office) can benefit from business interruption insurance. The size of the plan needed is dependent on how long a business can estimate they will be shut down in the event of an event that causes damage to the property. The costs of plans are dependent on the type of business and how prone the business’s location/s are to storms and other types of damage. 

Obtain Minnesota Business Interruption Insurance

If you are a business in Minnesota and need business interruption insurance, contact the commercial insurance experts at The Patrick J. Thomas Agency. We can help you create a plan that fits your needs Contact our agents today.