Business interruption insurance will take care of many expenses when a disaster or major interruption happens that forces a business to either delay production or shut down completely. This type of commercial insurance can usually be added to the business owner’s policy. If you’re a passionate entrepreneur who cares about your business, you should look into purchasing this type of coverage. Here are five reasons you should take advantage of business interruption insurance.
1. Takes Care of Taxes
Business interruption insurance ensures you’ll receive the money you need to pay business taxes if you’re unable to pay for them with your regular income due to an interruption in operations. Taxes are a significant part of running a business, and this type of coverage will allow you to avoid going into debt and facing legal action against you and your company.
2. Replaces Lost Income
If your business was on its way to making a profit and a disaster or interruption occurs, business interruption insurance may cover the lost profit you would have made if your production hasn’t been stopped by the disaster. Along with replacing lost profit, this insurance may also take care of the money your employees lose, ensuring they’ll get their paychecks if the disaster affects their ability to work. You should also keep in mind that while the insurance may cover employees’ lost income, it probably won’t cover any injuries to employees. You should purchase workers’ compensation insurance to cover those kinds of events.
3. Pays for Relocation Costs
You can also take advantage of business interruption insurance if you want to relocate to another site temporarily while your original site is being repaired after a disaster. This could include anything from transportation to payment for renting the new site for your business operations.
4. Pays for Business Loans
If you happen to miss a payment on a business loan, you’ll probably have to pay interest or face other consequences for nonpayment. Penalties and fines might be assessed if you fail to pay. Business interruption insurance will cover this expense so you can stay above water and be consistent with your loan payments.
5. Handles Lease and Mortgage Payments
Business interruption insurance allows you to continue to pay your lease and/or mortgage payments. Your landlord’s insurance might not cover any occupants, so it’s best to get your own insurance to cover yourself and your business.
Owning a business involves assuming certain kinds of risk, but operating without business interruption insurance is a risk you shouldn’t take. The reasons listed above are just a few of the factors that make this type of coverage an absolute necessity for many businesses. For reliable, affordable business and commercial insurance as well as homeowners, renters, motorcycle, and car insurance, reach out to the experienced professionals from Altra Insurance Services. Call us today at 619-474-6666 to find out how we can meet all your insurance needs