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Business Interruption Insurance Covers Time Lost Too

It’s not what any business owner wants to think about: having their business coming to a halt because of a storm, vandalism, or fire and water damage.

Back in November we talked about what to do if your business interruption claim is denied.

 

Generally what an insurance rider will cover can be summed up as the cost of the three R’s:

  • Rebuild
  • Replace
  • Repair

But the initial damaging incident itself is often not the heart of the matter. This is because it’s not just the brick and mortar or equipment that was lost but also the lost revenue incurred by not being able to operate your business. Business interruption insurance is meant to protect your prospective earnings.

As anyone who has remodeled a home knows, it usually takes twice the time and costs twice as much as what you initially thought. So all of those weeks spend waiting for new equipment is profit lost. Meanwhile the bills keep coming.

One option some businesses have is to continue doing business in a temporary location. This too incurs costs. A business interruption rider should cover those costs as that is the purpose of the rider: to indemnify your business.

In the event that you temporarily relocate, an interruption of business rider or endorsement should cover:

  • All costs related to renting equipment
  • All costs related to renting a temporary storage or retail area
  • The costs incurred moving to a temporary location
  • The costs incurred to move back to the original location

One important element to note is that the rider coverage should start the day of the damage. It does not however expire with the expiration of the policy.

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