Safeguard Business Operations with Interruption Insurance

Safeguard Your Business Operations with Interruption Insurance | Property & Casualty

A temporary shutdown or reduction of operations can devastate your business. As 25% of businesses never reopen following a disaster, it’s essential to protect your business from an uninterrupted disruption. Business interruption insurance can play a key role in ensuring operations resume following a disruption caused by a natural disaster, supply chain issues, civil disorder, political violence, an energy crisis and more. Discover how to protect your finances following a covered event.

Understanding Business Interruption Insurance

This coverage offers financial security when your business experiences temporary revenue losses and unforeseen expenses from an operational reduction or shutdown. Some policies will also cover when a civil authority (e.g., a government entity) prevents access to your business premises.

Business interruption insurance may provide coverage for the following:

  • Lost Income: Covers the revenue your business would have generated under normal operations
  • Continued Operating Expenses: Provides financial assistance to cover standard, ongoing operating expenses, including payroll
  • Relocation Costs: Offers financial assistance for moving expenses if your company must temporarily relocate
  • Rent or Lease Payments: Enables you to keep up with rent or lease payments even when your business is temporarily closed

Contingent business interruption insurance, a specialized coverage, can help mitigate losses due to supply chain disruptions. For example, if property damage to a vendor impacts your operations, this coverage can help reduce the financial impact. It's usually an addition to a standard business interruption policy.

Assessing Operational Risks & the Impact of Interruptions

Economic challenges, political concerns and continuous natural disasters have all been significant drivers of disruptions across the globe. The recent report from Allianz identified the top interruption risks that businesses face, including:

  • Economic Instability: In times of economic uncertainty, consumers may cut back on non-essential purchases, affecting businesses in different sectors by reducing sales and revenue.
  • Market Volatility: Financial markets can impact businesses that depend on investments or financial instruments for revenue. Sharp drops in asset value or currency exchange rate changes can influence profits and cash flow, possibly resulting in operational disruptions.
  • Political Risks & Violence: Political uncertainty (e.g., Ukraine) can bring business risks, such as supply chain interruptions, property destruction, regulatory modifications, currency volatility and civil disorder.
  • Supply Chain Risks: A late delivery of raw materials, components or finished products can disrupt production, resulting in revenue loss from unmet customer demands.
  • Energy Crisis: Disruptions in the energy supply can force production halts, operational delays or increased costs, resulting in income loss and additional expenses.
  • Natural Disasters: Property damage, utility outages, evacuation orders and effects on customer demand may lead to financial losses and extra costs while operations are suspended.

Looking for additional to protect your business from natural disasters? Download our Disaster Preparedness Guide.

Coverage Details of Business Interruption Insurance

This coverage is typically bundled with commercial property and liability coverage in a business owners policy (BOP). Companies with 100 or fewer employees and a revenue of $5 million or less may be eligible for a BOP that includes business interruption insurance. For all other organizations, business interruption insurance is available as a standalone policy or added to a commercial property policy. Partner with your trusted insurance advisor to review your existing coverage.

Additional considerations for business interruption insurance:

  • It’s not available for standalone purchase. It must be added to a property insurance policy or included in a business owner’s insurance policy.
  • It’s important to have policy limits that cover an extended period to rebuild your business space. Typically, there’s a waiting period before coverage starts, which doesn’t include retroactive payment for those days.
  • Coverage costs are determined by the property’s risk of disaster, influenced by factors like the business location, type and ability to operate from a temporary location.

We’re Here to Help Protect Your Business’ Future

Business interruption insurance is a crucial safeguard to protect your business’ operations and finances from unforeseen events. Without the right protection, natural disasters, economic uncertainty, supply chain issues and other disruptions can devastate your business. Connect with a member of our team to ensure resilience in the face of adversity. 


Safeguard Your Business Operations with Interruption Insurance | Property & Casualtyhttps://www.cbiz.com/Portals/0/Images/Temporarily Closed-1.png?ver=53811EkmOhD_HuynqwCqkw%3d%3dDiscover why business interruption insurance is essential: safeguard your income and stability against unexpected closures or disasters. Learn more now.2024-04-15T17:00:00-05:00

Discover why business interruption insurance is essential: safeguard your income and stability against unexpected closures or disasters. Learn more now.

Risk MitigationProperty & Casualty InsuranceYes