Is your business prepared in the event of a loss?
Are you running a profitable business? Are you running a business you hope to someday be profitable? What would happen if something really bad happened – let’s say a fire in your facility – and you had to shut down? Sure, your commercial insurance policy would likely pay for the damage to the building and your equipment, stock, etc., but while you wait for operations to be restored how will you pay the mortgage on the building or the utility bills? Are you OK with losing all of your trusted employees when you no longer have the funds to pay their salary? What happens to the profit you relied on to grow your business?
I know what you are thinking and you can stop calling me “Debbie Downer”; the fix for this problem will not be painful for your brain, or your wallet. Your commercial property policy will help to make your property whole, but it is a Business Income and Extra Expense policy that will make you financially whole - think of it as disability insurance for your business. The idea is that while you are down and out, you will still have those pesky operating expenses -- but you will no longer have all of the income that you relied upon to pay it, nor will you have any of the profit you were making prior to your loss. If you are still unconvinced that this coverage is necessary - here is a list of “stuff” you may want to ask yourself (and be honest – no one is listening):
- In the event of a loss, how much time would your business need to get back up and running?
- Do you think your employees love you enough to stick around while you rebuild without a paycheck?
- Do you have special equipment that would take extra time or money to be built or imported?
- How much extra advertising would you need to do to reassure your customers and clients that you were coming back?
- How much inventory or stock could you lose? How long do you think it will take before you would feel the full impact of that loss?
- Where would you conduct your business operations while the facility or office is being rebuilt? How would you pay to lease or rent another location in the interim?
The goal of this coverage is survival in the event of a big loss and without it you’ve only got about a 20-30% chance of making it (there’s Debbie again). Here is the really great part - it can be broken down to cover only what you actually need. For example, you can buy both the Business Income (limit will pay your Net Profit + Operating Expenses) and Extra Expense (all expenses over and above normal operating expenses – like renting that temporary office or paying your employees overtime so you get back up and running quicker) or you could buy one and not the other. You can buy the coverage and tailor it to pay for only the amount you think you need for the amount of time you think you need it for. It’s really up to you!
I recommend this coverage to my clients because I know running a businesses is about more than just your “stuff”; it’s about your bottom line. To learn more about Business Income and Extra Expense Coverage and how it can make you financially whole in the event of a loss contact me directly at (877) 352-2121 or email me at bkingsbury@clark-mortenson.com.
