Business Income and Extra Expense coverage is a misunderstood coverage and is often neglected, however it is the coverage that puts your business back to its original financial condition after an insured loss, such as a fire! If the building, your business is located in, suffers a fire, and your business is closed for a period of time, how will you pay your bills, pay your employees, pay yourself, or retain your customers? If your commercial insurance policy is written correctly, the insurance company will pay those costs and help you to retain or regain your customers.
It is very important to review your coverages and your business thoroughly with your insurance agent. For example most restaurants only have coverage for 12 months, however if the restaurant burns to the ground it will take much longer than 12 months to rebuild the premises and then to attract your customers back. Your agent needs to know how long it would take you to be back up to 100% after a total loss in order to obtain the correct coverage for you. Every business is different, so your coverage should be customized to your needs.
Keep in mind that your insurance policy is just a piece of paper to you until you suffer a loss! Are you confident that your coverage will respond when you need it? Will it respond the way you need and expect it to? The only way to be sure, is to discuss it with your agent. If you do not have an agent, see my September Briefcase for some of the reasons why!
