Business Interruption Insurance
Business interruption insurance would provide enough funds to pay a stores rent and utilities if it had to close for repairs. Such coverage can also cover costs if supplies or inventory are interrupted by a natural disaster or other circumstances beyond the owners control. These policies may also cover the cost of moving a business to a new location in case of an emergency or extended periods of closure caused by emergencies.
It is a good idea for any business that requires a regular cash flow to stay in operation to have business interruption insurance. The insurance keeps the business operating if the cash flow ceases because of an unforeseen emergency.
Business interruption coverage normally pays for expenses not covered by other kinds of business insurance, such as payroll, utilities, rent or mortgage, inventory, and other operating costs.
Cost of Business Interruption Insurance
The amount and cost of business interruption coverage is usually based upon the businesss financial records. If a business normally took in $5,000 a month, such coverage would provide $5,000 a month to cover costs until the business reopened.
Since business interruption coverage can be quite expensive, it might be a better idea for some businesses to rely upon their lines of credit or cash reserves, or to self-insure.
Businesses that have limited cash reserves and little credit available should definitely get business insurance quotes for business interruption insurance. Many businesses without this insurance fail when faced with an unforeseen emergency.
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