What would you do if you couldn’t conduct business for an extended period of time? Would you be able to survive if damage occurred and you were out of business for several weeks or months?
The answer for most small business owners is no.
Business interruption insurance can be as vital to your survival as a business owner as fire, flood, or any other type of business insurance. Most people would never consider opening a business without buying insurance to cover damage due to these types of risks.
Unfortunately, too many small business owners fail to think about how they would manage if a fire or other disaster damaged their business premises to the point where they were temporarily unable to conduct business.
Business interruption insurance covers you for lost income if your company has to vacate the premises due to disaster-related damage that is covered under your property insurance policy, such as a fire.
It also covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.
How much is Business Interruption insurance?
The price of the business interruption policy is related to the risk of a fire or other disaster damaging your premises.
All other things being equal, the price would probably be higher for a restaurant than a real estate agency for example because of the greater risk of fire.
Also, a real estate agency can more easily operate out of another location.
Fountain Valley is a city in Orange County, California. The population was 55,313 at the 2010 census. A classic bedroom community, Fountain Valley is a middle-class residential area.
The area encompassing Fountain Valley was originally inhabited by the Tongva people. European settlement of the area began when Manuel Nieto was granted the land for Rancho Los Nietos, which encompassed over 300,000 acres (1,200 km2), including present-day Fountain Valley. Control of the land was subsequently transferred to Mexico upon independence from Spain, and then to the United States as part of the Treaty of Guadalupe Hidalgo.
The city was incorporated in 1957, before which it was known as Talbert (also as Gospel Swamps by residents). The name of Fountain Valley refers to the very high water table in the area at the time the name was chosen, and the many corresponding artesian wells in the area. Early settlers constructed drainage canals to make the land usable for agriculture, which remained the dominant use of land until the 1960s, when construction of large housing tracts accelerated.