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Fire & Water - Cleanup & Restoration

Concepts To Understand When Dealing With Business Interruption Insurance

3/3/2022 (Permalink)

Financial concept meaning Business Interruption Insurance with sign on the piece of paper. Businesses can be disrupted by a variety of disasters, including severe flooding.

When It Comes To Business Interruption Insurance, There Are A Few Things To Keep In Mind.

Many different disasters, such as severe flooding, can result in business interruption. Whether the water comes from a broken pipe or a hurricane, your company will probably need to shut down while a water remediation company fixes the damage. If you find yourself in this situation, it is important to know the various terms you will find on your business interruption insurance policy.

Business Income

Your policy will cover reduced business income that is a direct result of the flooding. Business income is calculated using:

  • Typical net income
  • Normal operating expenses

Actual Sustained Loss

This type of insurance covers your Scarsdale, NY, business from any actual loss sustained due to flooding. This means you will only receive funds if you experience a disaster that directly contributes to your inability to run your business for enough time that you experience a loss of income. However, the amount of funds you receive is subject to the specifics of your situation.

Period of Restoration

Insurers are only responsible for your income that was lost during the period of restoration. This is the time from when the damage occurs to when the building should reasonably be operational again.

Extra Expense

Sometimes, business interruption insurance can be used to cover any extra expense. These are expenses incurred during the period of restoration that you would not have experienced if your business had been operational.

Service Interruption

Certain policies will allow their clients a service interruption extension for their period of restoration if they do not have the necessary utilities to operate their business. This extension does not require that clients name the utility providers as an added insured on their policy.

Understanding these crucial terms is critical to knowing whether your interruption insurance will cover the time you were shut down due to large water damage or another disaster. Make sure you read about these terms and your policy before trying to file a claim.

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