Most companies need numerous types of business insurance. One of the most important not to overlook is business interruption insurance. It provides financial support to you when your business must move or close down for a period of time. It only applies when the cause of the closing is a covered peril. One way it offers support is for lost wages. Take a closer look at how this may help you.
What Happens When You Cannot Open Your Business?
Here is an example of when this type of business insurance may help. A fire breaks out at your location. An electrical short caused it. Your business insurance plans to cover the repairs, but it will take several weeks to get back open. During this time, your company is not earning any profits. Yet, you still have obligations. If you have business interruption insurance, it can help fill in those financial gaps.
For example, the policy can help you relocate to another location for the repair time. It can also help you to pay the fees for operating at a new location. However, most companies also must consider their workers. Even if they are hourly workers, those people are dependent on your company. If you cannot keep them working, they may elect to find a new job.
How It Helps You Cover Employee Wages
Your employees may not be able to afford a lot of downtime like this. The good news is they may not have to. If you cannot operate for an extended period, the policy can cover the wages of your employees for that period. This would allow you to keep your employees with no risk of losing them while the repairs happen.
There are limitations. Most companies will use the average fees and costs you paid out over the last few weeks as a goal as to how much to pay employees. Additionally, if you can move the business – and do so – then those employees would likely be back to work. This would limit the length of time the coverage would last.
Do You Have the Right Coverage?
Not all companies invest in this form of business insurance. Yet, it can be one of the most valuable. Aside from paying for moving your company and employee lost wages, it helps in other ways as well. It can help you keep your vendors happy. It can handle many of the operating costs that are due as well as keep your business profitable.