Businesses need backup plans for emergencies. What happens to your company when a covered loss occurs that causes you to lose income? How do you pay your employees, for instance?
One way to help ensure your business has stability during a covered property loss is to add loss of income insurance to your policy. Loss of income insurance will help pay for specific continuing expenses that are covered under the policy, which could include payroll, taxes or mortgage payments.
This may also help replace any net losses you may accrue and cover your relocation or advertising fees if you must move to a temporary or new location.
Additional types of options and endorsements you may want to consider adding to your coverage include:
Utility services coverage
A natural disaster or other type of emergency can knock out water, gas and electric utilities, which can lead to a loss of business income. If the event or emergency is a covered cause of loss under your policy, your coverage may reimburse your lost income for the period of time you were without utilities.
Extra expense coverage
Businesses that may particularly benefit from this coverage include ones that operate constantly (e.g. a local emergency vet or convenience store), or can’t close down even in an emergency, such as a nursing home. However, any business can benefit from this type of extra expense coverage to mitigate the risk of covered disasters that can impact or pause operations.
Civil authority coverage
If you live in an area prone to natural disasters, civil authority coverage may be right for you. This coverage provides income if you are forced to close your business due to an evacuation or disaster, such as from a wildfire or a hurricane.
Dependent property coverage
Dependent property coverage is for businesses that rely on other businesses to supply them with goods and services. If your supplier shuts down, you may lose income, but dependent property coverage pays for your losses. This type of policy also covers costs if consumers have paid for but cannot receive your services. Likewise, if a company in your immediate vicinity that is responsible for introducing customers to you goes out of business due to a covered loss and can no longer refer business to you, dependent property coverage pays for losses your company incurs due to this decline in business.
These coverages supply you with business income in times of need, allowing you to pay your employees and get your business up and running again. You can discuss your options and endorsements with your insurance agent to help ensure you have the coverage that best protects you and your business.
Learn about more ways to protect your business with these safety and loss control resources.