No matter how many precautions you take, some circumstances are out of your control. This is especially true when it comes to running your own business. Because your ability to generate income could be threatened at any moment, business interruption insurance is particularly helpful.
Oegema Nicholson and Associates can help you acquire the right coverage to protect your bottom line. Whether you own a retail outlet or accounting firm, our brokerage can bring you peace of mind and prepare you for whatever comes your way.
What is business interruption insurance?
This important coverage is vital to your survival as a business. Should a fire or other disaster damage your premises, your workspace could become temporarily unusable. This would then affect your ability to serve clients, severely impacting your income. Business interruption insurance allows the owner to collect the income they would have generated were it not for the unfortunate event.
Business interruption insurance is not offered separately. It’s rolled into your property insurance as additional coverage. This coverage can be either a named perils policy or an all risk policy. The former covers a list of specific perils, whereas the latter provides protection against all perils — other than those specifically excluded from your policy.
How does it work?
Let’s say you own a clothing boutique, and a gas explosion has caused extensive damage to your store. For safety reasons, you and your employees have been barred from entering the premises. This means your boutique must remain closed until repairs are complete. Business interruption insurance would compensate you for lost income during this time.
The period of time you’re covered can vary from policy to policy. This period is known as indemnity. There are two basic types of business interruption indemnities:
- Limited – This type of policy will only pay until the repairs are complete. As soon as your business activities resume, your insurance will stop paying out — even if you’re not producing your previous level of earnings. Limited indemnity is much cheaper than an extended policy, but it may not offer enough coverage following a disaster.
- Extended – This indemnity continues to pay until your business revenue is back at its normal, pre-disaster level. Just be aware that your policy will state a maximum period of indemnity as extended periods are not indefinite.
To determine how much revenue your business typically generates, your insurance provider will ask for your financial records. The policy will also cover your operating expenses, like hydro or internet, that continue even though your business activities are temporarily on hold.
Oegema Nicholson can ensure your policy limits are sufficient to cover your business for more than a few days. Following a major disaster, it can take weeks or even months to get your operations up and running again. There is usually a short waiting period before business interruption kicks in. Our trusted insurance advisers can help you better understand your policy, so there are no surprises when you make a claim.
How much does it cost?
Your premiums for business interruption insurance is related to the risk of a fire or other disaster damaging your premises. This risk is often determined by the type of business, its location and whether similar claims have been filed in the past. Typically speaking, the costs would likely be higher for a restaurant than they would a law firm because there’s a greater risk of fire. Additionally, a law firm can more easily operate out of another location — whereas suddenly relocating a restaurant is nearly impossible.
At Oegema Nicholson, our mission is to connect our clients with some of the lowest rates in the industry. Our insurance experts can shop around for you. We can help you choose the best policy that meets your needs — at a price you can afford.
Why trust Oegema Nicholson?
Proudly serving Canadians since 1961, Oegema Nicholson has the expertise to deliver a comprehensive policy for your business. We can help you develop an insurance coverage strategy that addresses risk and closes any gaps in your overall protection plan. Lost revenue will not only affect your business’ bottom line, but also the livelihood of your family. Have peace of mind knowing your income will be covered in the event of an unexpected emergency.
For more information on business interruption insurance, call us at 613-224-1455 or contact us here.