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As a business owner, you are probably aware of the need for property insurance for your building and contents. Oftentimes these policies are easier to understand and to justify purchasing.


However, in event of a loss, you may suffer a large business income or business interruption claim. In many instances, the business income loss can exceed the direct loss to the building, equipment or contents. Imagine a suspension of operation at your business that would inhibit your ability to earn income. Could you still afford to pay your rent, your employees or your utilities?


Most businesses don’t have the liquid capital to support an extended outage or reduction in normal operations, and may fail as a result. To illustrate this, it can help to go through several “what-if” scenarios with your business continuity in mind.

For example, if you are a manufacturer and you were to lose your key production machine to a covered cause of loss, how quickly could you fix or replace that machine? Would that reduce your sales or income in the meantime? If you are a florist and a covered power outage ruined your flowers right before Valentine’s Day, would you suffer loss of business or customers? Could you easily get those customers back once you resume operations?


You might already have coverage for the damage to the machine or the damage to your flowers, but you should consider the impact to your business a loss could have in the form of reduced sales and continued expenses. This could negatively impact your position in the market, or even cause your business to fail.


You can help avoid this by discussing your sales, expenses and revenue with people in our agency. Together, we should be able to formulate a plan and select the appropriate business income coverage to meet your needs. Make sure your risk management strategy includes appropriate insurance products for all your exposures, including business income.

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