Business Interruptions
Wesley Eaves
You deserve to know exactly what your business, home and auto insurance covers | A Modern and Transparent Approach to Business, Home and Auto Insurance! Founder of ANI Insurance Services | Send me a DM now to chat!
Business Interruptions. At best they’re a nuisance.?At worst, it could last long enough to be highly detrimental to your business. Most business that fail after a loss do so, more often than not, because of lost revenue.
Most business owners try to plan for certain things and put contingencies in place when possible. But what about when it’s out of your realm of control?
My ISP had an outage recently. Fortunately, I have a mobile hotspot which kept the computers connected and was able to re-route our incoming calls to my cell phone. I don’t know what caused the outage, but it was repaired later in the day and all I experienced was a minor inconvenience. I took a lot of calls on my cell phone, work took a little longer than normal and more lines of communication were open than typical, but we got all the work done and kept all the customers happy.
?At lunch, I was going to order a pizza from the Crust Pizza place across the parking lot. I love their pizza. It takes a lot of restraint to not eat there every day. Their online ordering was down, so I tried to call. The call wouldn’t go through. Duh… Their internet was down also. The whole property has one option for internet.?Fun times…
?Side note, technology like VOIP is great until the internet doesn’t work.
? Anyway, I walked over and ordered the old fashion way - in person using face to face communication. I noticed that it was much more quiet than normal because they weren’t busy at all. I don’t normally see the manager out front, but he was this day. So I asked about their internet. He confirmed it was down which was hurting his sales because that location gets a lot of online and call-in orders to-go. Neither of which were operational.
?This will probably end up being little more than an inconvenience for his store as the power was still on and the internet was restored later that day.
?But what happens to businesses when major interruptions happen.? What solutions exist for when you can’t have a backup plan and it’s out of your control?
?Take for example, the businesses in Florida right now. They had widespread outages or more than just internet. Yes, the linemen were staged and ready to go. Thank you to all of those linemen who reported from all over the country to help. But it still takes time to repair. Do the communication lines come back as soon as power is restored? Maybe. Maybe not.
Most doctors, dentists, optometrists, orthodontists, etc. know exactly how much it costs for them to be gone for just a single day. If they are gone, patients can't be seen but staff still draws a salary and bill are still due.
?Does business pick back up as if it never stopped once the electricity is turned back on? Maybe in a few cases, but for most businesses, the answer is “no.” It takes time to get back to previous levels of efficiency.
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Property Owners, would all your tenants come back? How long would it take to get all of your units leased again?
?What happens to your business if your operations get interrupted? What can you plan for and what contingencies can you put in place? Maybe there are backup plans but they are impractical or unreasonably cost effective. What do you do then?
?Does your business have Business Interruption insurance? Did you know that was even a thing?
?Yes, it’s a thing, and it may be a much more cost effective or practical solution than backup plans. ?
?It can be as simple as insuring revenue if your business is physically damaged for the period of time it takes to make repairs. It can be expanded to include:
???????????- if you need this one, you will want to make sure that it includes damage to overhead ???????????????????lines also (not automatically included).
?Depending on your policy form, you may or may not have it. If it’s a Business Owners Policy, there is typically some coverage for things like this. You’ll want to review it to make sure it has the right type and amounts of coverage for your business.
What does it cost you to be closed down for a day or a week? How much is on the line if you were forced to close down for longer?
Business Interruption coverage insures the existence of the business.?Make sure that temporary sign doesn't become permanent.