Many small to medium businesses are successful as long as they keep the doors open and the customers keep visiting. However, when something occurs that limits a small business’ ability to operate, it becomes hard to keep paying employees, utilities and vendors. If you are unable to keep your company's finances in order — even if a covered incident occurs — you may find yourself out of luck. Many business owner’s policies (or BOP’s for short) can help you with this need by providing a loss of business income protection.
What Is Loss Of Business Income?
Many BOP policies offer loss of business income coverage. Do not assume you have this type of coverage, though. Rather, talk to your agent or read through your business insurance policy to ensure it is accurate and listed. In short, it helps to keep your business funding in hand if a covered incident occurs.
For example, if and a fire breaks out destroying your business's inventory, you may be faced with financial limitations. You may have to temporarily close down while the fire damage is being repaired. If you have loss of income coverage as part of your BOP policy, the coverage can step in to cover the revenue you would have received if your company was operational during that time.
Do You Need It?
Oftentimes, loss of income isn't the first thing companies think about when purchasing business insurance. Rather, they focus on the risks to their equipment, inventory and building. However, if that fire came through, how long would you be out of business while you cleaned up, made repairs, purchased new inventory and got the doors back open? This type of coverage ensures your vendors are paid and can help you with other financial obligations, such as rent and payroll, until you can get back to operational status.
Take a closer look at your business insurance policy. If your BOP does not specifically list this type of coverage, consider adding it on. This can give you the peace of mind to know that your company can keep up and continue to meet financial obligations when situations like this occur.
We’ve got you covered. Call Legacy Insurance at 719-593-5814 for more information on business insurance.