Business Income Insurance
What You Need to Know About
Business Income Insurance
Since 1956, RJ Ahmann Company has been a premier provider of business income insurance nationwide.
Could your business survive the aftermath of a fire?
Imagine receiving a phone call in the middle of the night and learning that your business is on fire. No one is injured, but your building is severely damaged. It will take six months to restore the building to working order. Could you afford to lose six months of revenues while bills continue to accrue? Could you afford the expense of relocating to a temporary location? Would your employees stick with you or would they find other jobs? With business income insurance coverage, you would be prepared to manage this loss and maintain the profitability of your business.
What is business income insurance?
The first thing you think about in the event of a tornado or fire is the physical damage to your building and its contents. More critically, if you lost access to your facility and/or equipment, you would lose the ability to make money. In this scenario, business income insurance is essential. It protects the income stream of your company. Business income insurance (also known as business interruption insurance) typically has the following three components:
- Business income (BI) coverage: Replaces the lost gross earnings (profit) during the shut-down resulting from a covered property loss.
- Extra expense coverage: Covers the cost to relocate to another location and continue operations. During relocation, businesses typically incur the extra expenses of rent, equipment lease and the cost of restoring databases. All of this is covered by the "extra expenses" portion of the policy.
- Ordinary payroll: This optional coverage continues paying your workforce while you have no work for them. It prevents your trained employees from accepting other jobs while waiting for your business to recover. This coverage is optional, but is recommended in many circumstances.
More than 25 percent of all businesses that close following a disaster never reopen. - Insurance Information Institute
Who should have business income coverage?
Any business that has a physical location with contents, equipment, tools or information that are essential for transacting business should have business income protection, It is critically important for manufacturing, processing, retail and wholesale businesses. If damage to your physical location would result in the interruption of business and would interfere with your ability to generate revenue, your business should be protected by business income insurance.
How does it work?
BI insurance or business interruption insurance is triggered by a covered property loss claim. Typically, a business income insurance policy replaces any lost gross profit while the company replaces/repairs the property. It also covers the extra expenses related to keeping the business operating during a business interruption. In some cases, policies continue to pay employees during even if they’re not working.
To maintain optimal protection, your agent should help you complete a business income insurance worksheet every year so you know how much coverage you need as your business grows. Determining the appropriate limit is challenging. Make sure to consult with a business interruption expert.
A smart solution
If you need business income insurance, or if you just want to learn more, RJ Ahmann can help. With over 50 years in the industry, we’ve helped thousands of businesses stay afloat during stressful circumstances with business income protection. Our experienced business interruption experts will help you obtain comprehensive, cost-effective insurance coverage – tailored for your business’s unique needs. Our Minneapolis agency represents a variety of “A” rated insurance companies who also provide all other necessary coverages including umbrella insurance.
To ensure that you get the strongest business income insurance protection at the best rates, we...
- Understand your business and assist you in completing business income worksheets to determine proper coverage limits.
- Help you understand your business interruption potential through in-depth analysis.
- Analyze your business operations to determine potential business income losses as a result of specific operational breakdowns.
Ready to learn more? RJ Ahmann is ready to help with solutions for business income insurance!