What You Should Know About Business Interruption InsuranceKathy Sigstad
Imagine disaster strikes at your premises or a key supplier’s location and your operations come to a halt. Could your business withstand the impact? The results could be devastating— and although most manufacturers are insured for Business Interruption, many are not fully informed on how the coverage works or how to determine an adequate limit. The limit could be the deciding factor in whether you can financially recover.
If your business is shut down, either through a traditional loss like a fire, or emerging risks such as cyberattacks, you could suffer:
- Lost income with ongoing operating expenses
- Heightened vulnerability to competition
- Permanent loss of important customers
- Loss of employees
When discussing Business Interruption coverage with your Insurance Broker, be sure to address these concerns that help in assessing the specific types and amount of coverage you need:
- How quickly can you get a key piece of machinery repaired or replaced?
- Do you have production lines duplicated which have spare capacity?
- Is the technology you currently employ readily available or compatible with current technology?
- Is your building specifically designed for your operation? How long will it take to rebuild?
- How long will it take for you to get your revenue streams back to where they were pre-loss?
- Who are the employees critical to your organization’s survival?
Additionally, to make sure the policy responds how it should, it is important to understand and consider these questions:
- What policy form do you need (Profits vs. Gross Earnings vs. Extra Expense)?
- How long will it take to get back up and running? Is the indemnity period on the policy sufficient?
- Have you projected at least two years ahead for future losses?
Contact a CapriCMW Risk Advisor for a thorough analysis and review of your Business Interruption requirements.