California Business Interruption Insurance
Business interruption insurance should be considered to be as important to your insurance portfolio as a business as fire insurance. Most people would never consider opening a business without buying insurance to cover damage due to fire and windstorms. But too many small business owners fail to think about how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable. Business interruption coverage is not sold separately. It is added to a property insurance policy or included in a package policy.
What Does California Business Interruption Insurance Cover?
- Revenue you’d normally make if your business was open.
- Mortgage, rent, and lease payments for space where your business is located.
- Loan payments that you need to make during that time.
- Taxes, whether you pay them monthly or quarterly.
- Payroll for your employees.
- Relocation costs if you have to move to a new or temporary location because of physical damages.
How Coverage Do I Need?
It can be hard to determine how much business interruption insurance you need. A good rule of thumb is to use your gross earnings and projections to estimate future profits and determine the right amount of coverage. Remember, if your business interruption costs exceed the coverage limit you choose, you’ll have to pay out of pocket for the extra expenses. However, any coverage is better than no coverage.