Unwanted Interruption

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Most business owners grasp the concept of losing tangible assets through a calamity such as a fire, explosion, windstorm, water, and other unexpected and unwelcome events. Equally important is the protection and preparation for the amount of time lost from a business disruption. Purchasing “business interruption” is just as crucial as insuring buildings and personal property. During the restoration process it is essential that one keep their business going so it will still be there when all the repairs are completed. Factories and manufacturers have to wait out the process since their operations cannot be easily moved. They should purchase a limit sufficient to pay lost profits plus ongoing expenses for the maximum expected down time- to include payroll. Other businesses such as law offices and retail would purchase insurance to provide the “extra expense” to relocate either permanently or temporarily while still operating their businesses as the claim is being settled. Business Interruption for apartment houses would be lost rents. For schools it is tuition. Insurance can handle most of the financial set back but it is also wise to do some preliminary planning as well. Businesses should have a disaster plan that includes key contacts and vendors and emergency procedures. There are enterprises that are ready to provide make shift offices to a disaster victim. An effort should be made to establish mutual agreements with friendly competitors to assist if needed. Any business that fails to plan for a business interruption is planning to fail if they have one.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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