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This tip was provided by Danny R. Benson
Recently tornados hit our town damaging businesses and residences.
Insurance coverage on the building and contents became very important to
the homeowners and businesses that were damaged. What we found once
again to be the next most valued coverage is the business interruption
coverage for businesses and loss of use coverage for individual homes.
For businesses this coverage protects the loss of
earnings as a result of the physical property being damaged and either
profitability or impairing the continuation of business. This coverage
replaces the economic loss the business suffers. The insurance
company pays the "net income" before taxes a business sustains as a result of impaired earnings or discontinued earnings until the
physical structure is either repaired or replaced.
Example: A business earns $120,000 annually or
$10,000 monthly. If it required six months to repair or replace, and
the business owner was unable to continue in business, the coverage would
pay $10,000 a month totaling $60,000.
The business interruption can also be written
with "Extra Expense" coverage which would pay additional
expenses for moving to another location, overtime of employees, temporary
rental of another location, etc.
The Building and Contents Insurance takes care of the immediate
loss and the business income gets the
business through the loss and back in business again. |
