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It is estimated that between one-third and one-half of all businesses have no business interruption insurance. Almost half of businesses that experience a serious loss never reopen...over one-fourth of those that do, close within 3 years. A major reason that many businesses don’t survive a serious loss is the lack of business interruption insurance or inadequate limits of that coverage.
A major reason that many businesses don’t survive a serious loss is the lack of business interruption insurance.
As an analogy, most individuals need at least three types of personal insurance.
Commercial property insurance which, like life insurance, pays for direct damage to property if it is totally destroyed by a covered peril. Like medical insurance, commercial property insurance also pays for the cost to repair the property if it is only damaged and not completely destroyed.
Comparable to disability insurance in that it pays for the business’s loss of profit and expenses that continue while the business is not fully operational during repair or relocation following a loss. Almost half of all businesses that experience a serious loss never reopen their doors and over one-fourth of those that do, close within 3 years. Again, a major factor in such business failures is the lack of adequate business interruption insurance.
Covers three types of losses or expenses that occur while the business’s operations are interrupted or curtailed:
In addition to its loss of profits, a business must continue to pay some bills whether its doors are open or not. Some businesses will incur extra expenses in order to remain open at a temporary location. Business interruption insurance pays for these losses and costs.