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Business Income Insurance

Posted by / Filed in: Business Insurance

How Business Income Insurance Can Save Your Livelihood

No business owner wants to ever think about loss. Not in the form of good employees, nor of income streams. However, loss is often times unavoidable—it’s just a reality of life. But imagine losing the business you built from the ground up simply due to a far too common mistake.

Not having business income protection is like playing with fire in a 100-gallon drum of gasoline—not a good idea. But too many business owners are running their business without this invaluable protection.

Here are two big reasons to purchase business income protection:

It Keeps You Paid

The unfortunate reality of doing business is that it is entirely based off your customer base. There are many factors that go into a downturn in business—and customer buying power is a fickle mistress.

Let’s pretend for a minute you own a booming restaurant downtown. Suddenly there is a fire in the kitchen and you lose everything. How would your business survive? The drop in diners from the fire may only last a few weeks, but what if it’s longer? What if no one walks through the door for three to four months? When your business has suffered incredible physical damage, are you prepared for the resulting loss of income?

Business income protection provides you with money until you can get up and running again. If there is no revenue coming through the door, it is important to make sure you can still pay your employees and keep supplies in the hopes customers start running through your entrance once more.

It Keeps You Open in Disaster

Murphy’s Law, “anything that can go wrong, will go wrong,” is far too true. This isn’t just the case when it comes to our personal lives, but with businesses as well.

If you’ll recall a few years ago, a derecho swept through the Eastern Panhandle, knocking out power, damaging homes, and wrecking businesses. That derecho was so powerful that it tore off the roof of one of our business clients. Thankfully they had coverage that got them back on their feet the very next day.

However, not all businesses are as lucky to only need a roof replacement.

Let’s again pretend that you are the owner of a small Mexican restaurant—yes, we love food! It is the weekend of New Year’s Eve and there is an electrical fire that starts in your ceiling. You lose equipment and furniture, but the business sustains no structural damage. You can technically reopen the next day, but you are now without grills, refrigeration, or tables and chairs.

Thankfully you are insured with business income protection! Now your losses don’t have to hurt as much because you can file a claim and close the gap between your disaster and reopening. Business income protection would provide you with the funds needed to restock your restaurant with equipment and furniture to get back up and running in no time!

Other things you’ll want to take into consideration with business income protection is profit and loss figures while you are waiting for your business to get running again after a claim. What expenses are no longer needed while your building is being rebuilt after a fire? No need to pay a janitor, internet, phone, or other utilities. Those line items would discontinue for a time and wouldn’t calculate into your business interruption needs.

How long does it take to rebuild a restaurant or storefront? The time needed to rebuild needs to be calculated into your coverage so you are able to pay what you need while you’re waiting for income streams to resume.

Business income protection may be an often overlooked insurance policy, but loss of income could end up being bigger than any other part of your loss! Ensuring you have coverage could be the difference between a temporary inconvenience and a devastating tragedy.

If you have questions about business insurance policies, contact Smallwood & Small today! Call 304-263-3361 to talk to an agent at our Martinsburg office or 304-229-7227 to reach our Inwood office. You can also visit our business insurance page for a quick quote!


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