With winter comes the possibility of harsh storms that may slow traffic, close roads and even cause temporary business closures due to inaccessibility or broken equipment. Small and medium-sized organizations rely on continuous revenue to remain in business, meaning that even a single short business interruption can be incredibly costly. In addition to disrupting the cash flow of a business, closures can damage an organization’s reputation and create the possibility that otherwise loyal customers may do business elsewhere.
Business Interruption Insurance
Business interruption insurance provides protection against a variety of disruptions, including natural disasters, equipment damage and vandalism. Business interruption insurance can assist with or completely cover the following costs:
- Income lost while closed
- Rent or lease payments owed during a closure
- Expenses of moving an organization to a temporary location, sometimes including both moving and rent costs
- Lost employee wages
It’s important to discuss your specific business needs with a trained expert, as plans can differ in what they do and do not cover. An unfortunate recent dispute regarding a Toronto bakery shows why it’s important to take the time to consider all possible scenarios. After a severe power outage forced the bakery to close for several days, they sought coverage for $75,000 for loss of inventory and stock spoilage plus $150,000 under their business interruption insurance.
The bakery’s business interruption coverage included spoilage of stock resulting from physical loss or damage to equipment on the premises, however; because the power outage was caused by damaged electrical lines off-premises, the bakery was not covered and their lawsuit against the insurance company was eventually dismissed.
The trusted experts at Access Insurance Group Ltd can keep this situation from happening to you by ensuring your plan coverage is comprehensive, giving you peace of mind so you can focus on your business.
Contact us today to find out how we can help you avoid business interruption.