How to Survive a Business Interruption
One of the worst possible scenarios for the average small-business owner is the inability to conduct business. It could be due to a natural disaster or something as small as a major supplier going out of business.
Whatever the cause, the impact is clear – a loss of earning potential and inability to fulfill orders or conduct business.
Fortunately, there is a way to prepare for the worst by purchasing business interruption insurance.
This special type of policy provides protection in the event a business is not able to operate or function. It typically will reimburse the business for lost profits and provide additional funds needed to pay continuing expenses, including the need to reopen in a temporary location or the cost to relocate. Unlike traditional insurance policies that cover damages liability claims or damages to property, business interruption insurance helps offset the indirect costs associated with other losses.
Many small business owners find this an invaluable form of protection. In fact, nearly any small business owner who cannot afford to lose an income stream is likely to benefit.
It is becoming standard practice for business partners, suppliers and providers to demonstrate some level of interruption insurance or other accountability in order to become an exclusive vendor.
Otherwise, it’s wise to have a secondary supplier for critical items or services.
Small business owners wishing to compete for exclusive service rights are especially likely to benefit from the additional layer of protection that is offered by interruption insurance.