If you’re a business owner with one or more physical stores or offices, you probably have property insurance protecting those places from a natural disaster. However, there’s another matter than many business owners don’t consider, and that’s business interruption.
While your damaged place of business is undergoing restoration and repair, what happens to the loss of revenue while people are unable to do business with you, not to mention ongoing operating expenses and other costs of doing business?
Here are some of the ways business interruption affects your bottom line:
1. Lost income
This is the most obvious way business interruption causes problems for your operation. If you’ve lost merchandise, computer systems, data and other assets, you won’t have the income to keep the business running.
2. Operating expenses
If your business has been destroyed by flood, fire or some other act of nature, you’ll still have operating expenses like employee wages, services, subscriptions, etc. Without an income stream, those would be difficult to cover.
3. Temporary relocation
For long-term repairs, you’ll most likely incur the expense of having to set up shop at a new, temporary location. This will involve having to pay relocation expenses, rent and utilities.
4. Government-Mandated Closures
Sometimes business interruption can occur without a natural disaster. If the government decides to close the street in front of your business, for example, or shut your business because other businesses nearby have been damaged, that can also mean days, weeks or months of business interruption.
Business interruption insurance covers many of the above losses, but if you’d like to discuss your own business interruption concerns in a little more depth, feel free to give us a call at: 703-754-4300