Texas Insurance Claim Lawyer Explains What Causes Business Interruptions And How to Protect Your Company
An interruption of business can spell financial doom for some companies, particularly small businesses. Fortunately, there are ways to protect your business from loss if your business is unable to operate due damage from fire, a natural disaster, or other similar event.
Protecting Your Business From Interruption
Business Interruption Insurance policies are designed to protect you and your business by providing you with monetary payments to cover lost income, pay for your business' continued operating expenses and any additional expenses incurred while rebuilding after a covered loss. Unlike commercial property insurance, business interruption insurance does not provide you with funds to pay for the rebuilding of your property, but rather helps you and your business stay afloat during the rebuilding time. Rent, utilities, and payments to vendors and suppliers are some of the things business interruption coverage can pay for.
Understanding Business Interruption Coverage
Business interruption coverage typically only activates if you are forced to vacate the business property due to covered damages or loss. Payments begin right away, some as soon as 24 hours after the loss occurs. It's important to note that business interruption payments will only be made if the property has been damaged by a covered risk. So, if your business gets flooded but you are not covered by flood insurance, you would not be eligible for business interruption payments. There are four types of business interruption coverage:
- Business Income Coverage covers your profit/loss before taxes and operating expenses. Coverage amount will be based on recent sales/expenses.
- Extra Expense Coverage covers additional expenses associated with restoring your business. Rent of temporary location is a good example of an extra expense.
- Contingent Business Interruption Coverage pays you if one of your suppliers suffers a loss that affects your ability to do business.
- Civil Authority Coverage provides you with income if you are prevented from operating your business due to government restrictions.
You'll need to review the individual policies to determine which coverage is right for your business. You may not need certain coverages while others may be a necessity.
Contact A Texas Insurance Claim Lawyer For Help With Business Interruption Coverage
A qualified Texas insurance claim lawyer can review business interruption policies and help you select the right coverage for your needs. Steve Ferrell is a Texas insurance claim lawyer and Houston trial attorney who specializes in helping business owners make claims against their business interruption policies so they can keep the business running even after a major disaster. For more information about Business Interruption Insurance or filing an insurance claim, contact The Ferrell Law Firm today at 713-800-0220 for a free consultation.