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.
Midway City is a census-designated place located in Orange County, California. It is bordered by the cities of Westminster to its east and Huntington Beach to its west. It was so named because it is midway between Long Beach and Santa Ana. The population was 8,485 at the 2010 census.
It is one of Orange County's oldest communities, and many of its homes are 1950s construction. It includes two mobile home parks. The residents who live here are of moderate income, with many of them senior citizens. Although the community is only 2.4 square miles (6.2 km2) in area, it has over 15,000 residents.
Recently, the Local Agency Formation Commission announced that the community might be annexed to Huntington Beach, the city that is most financially capable of encompassing the community. Prior attempts for annexation have met fierce resistance from Midway's residents, who would rather have it remain an unincorporated area of the county, to maintain lower water and property tax rates than neighboring communities. Signature drives have been highly successful in repelling annexation attempts from not only Huntington Beach, but the city of Westminster to its Southwest.