Every day you are unable to operate is a day of lost income, for you personally and for the business. If the property damage or loss prevents you from providing products or services to your customers or clients, they may go elsewhere and many of them may never return. If you are to keep your employees, you must continue to pay their wages, even when the business insurance is generating much less than normal income.
It is little wonder that many businesses that lack insurance to cover the potential ongoing economic effects of a serious destructive event are unable to survive. A survey by the National Association of Insurance Commissioners found that only 35 percent of small businesses, defined as firms with fewer than 100 employees, have business interruption insurance.
Prudent businesses have disaster recovery plans that include insurance to cover lost income and extra expenses that can result from getting back on track after a covered loss.
Because coverage for lost income and extra expenses is so important to continued business survival, it is part of the standard BOP. The policy covers actual loss of net business income that would have been earned had it not been necessary to suspend operations due to a covered cause of loss. The policy also covers continuing normal operating expenses such as utility payments and payroll.
Prudent businesses have disaster recovery plans that include insurance to cover lost income and extra expenses that can result from getting back on track after a covered loss.
Because coverage for lost income and extra expenses is so important to continued business survival, it is part of the standard BOP. The policy covers actual loss of net business income that would have been earned had it not been necessary to suspend operations due to a covered cause of loss. The policy also covers continuing normal operating expenses such as utility payments and payroll.
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