When a hurricane or other natural disaster forces you to temporarily close your business, what do you do to repair your building or replace your lost inventory? Most likely, you file an insurance claim. Hurricane, fire, flood and other types of property insurance policies provide coverage for all types of events, and many businesses – especially here in South Florida – have these policies as critical safety nets to protect them from the financial consequences of a catastrophic storm.
But, what about your business’s other major source of loss – the loss of income due to your inability to sell your product or provide service your customers? This is covered by another type of insurance, called “business interruption” coverage.
When Does Business Interruption Insurance Apply?
We have previously covered the three primary types of business interruption insurance. To recap, they are:
- Basic Business Interruption Insurance – Covers the business’s lost income during the period during which its physical property is being restored.
- Extended Business Interruption Insurance – Covers the business’s lost income for a predetermined time period after the business’s property has been restored as it re-establishes its operations and customer base.
- Contingent Business Interruption Insurance – Covers business interruptions caused by issues other than damage to the business’s own physical property (i.e. hurricane damage that shuts down a key supplier).
When considering your company’s business interruption insurance needs, there are a number of important considerations to keep in mind. Do you operate a storefront business that relies primarily on local traffic? If so, basic coverage may be sufficient; although, if the area around your business experiences blight in the wake of a storm, would you need extended coverage as well? If you run a web-based business out of your home, do you know where your suppliers are located? Do you know what business continuity and recovery plans they have in place to make sure they can fill your orders in the event of a natural disaster in their area?
If you do not know the likelihood and your potential exposure in the event of an unexpected interruption, it will be very difficult to make an informed decision about your company’s insurance needs.
Resources for Evaluating Your Company’s Business Interruption Insurance Needs
At Saavedra Goodwin, our lawyers help businesses in Broward County and throughout South Florida assess their risk exposure and process business interruption insurance claims. To learn more about your company’s insurance needs, we encourage you to review the resources linked below and then contact us for an initial consultation:
- Assessing Business Interruption Timeframes
- Business Interruptions Due to Vandalism
- Business Interruption Insurance for Indirect Causes
- Business Disaster Losses Can Extend Beyond Physically-Damaged Areas
- Understanding Damages from Business Interruptions
Speak With the Broward County Insurance Claim Lawyers at Saavedra | Goodwin
For more information, we invite you to schedule a consultation with one of our experienced business insurance lawyers. We represent companies of all sizes, and we work with businesses throughout Broward County and all of South Florida. To speak with an attorney about your company’s needs, call (954) 767-6333 or contact us online today.