Effective October 1, 2023, Rooney Insurance will be located at 5100 E Skelly Dr, Suite 1010 in Tulsa, Oklahoma
Effective October 1, 2023, Rooney Insurance will be located at 5100 E Skelly Dr, Suite 1010 in Tulsa, Oklahoma
Business interruption insurance is a protection plan that can safeguard your business against threats that could cause the business to close. Business interruption insurance (or business income insurance – the terms work interchangeably) is protection that works just as the name implies. It will cover the cost of business income loss up to the policy limits (subject to deductibles) if an insured physical loss or damage to insured business property occurs. The policy itself will describe specific events that trigger business interruption coverage. For instance, fire temporarily closes a business and interrupts revenue flow.
Business interruption coverage is usually in “Business Owners Policies.” These policies set up smaller businesses for a generally lower risk. For larger companies, business interruption coverage can be added to the Commercial Property Insurance policy by endorsement for an additional premium.
Most business interruption policies have a “period of indemnity” that the policy will help pay for lost income and expenses while the business recovers. Most policies limit the period to a specific number of consecutive days and maximum recovery.
Some policies have a “waiting period.” Think of this like a time deductible – a specific number of days after the physical damage occurs before the policy’s coverage for business interruption loss starts.
Ongoing business costs that happen for coverage at the time of a business interruption claim can include:
When considering business interruption insurance, determine if the policy you have or may purchase includes Extra Expense insurance. Extra Expense covers necessary expenses during the period of restoration that the business would not have incurred had there been no physical damage to the property.
Common examples are the expense of temporarily relocating the business operation to another location. Also, it could cover the cost of paying overtime while relocating, etc.
Not all policies include coverage for losses incurred when an order of civil authority prohibits access to your business premises due to physical damage caused by a covered peril to another property adjacent to or nearby your business.
Commercial Property policies that provide coverage for the additional cost of repairing a building to bring it up to code, ordinance, or law can also insure the business interruption losses arising from the increased period required to make those additional changes.
The COVID-19 pandemic and government-imposed shutdowns forced many retail businesses to either close entirely or drastically alter their business model for several months or longer. The losses of revenue nationwide were staggering. As the affected companies tried to claim business interruption for these closures, they were largely disappointed as nearly all such claims have been denied.
The common thread throughout all the denials has been that for coverage to be triggered, direct physical damage to the business property had to have occurred and that COVID-19 did not cause direct physical damage to the property.
Providers have amended commercial property insurance policies of all varieties to exclude virus-related claims since the pandemic. However, larger businesses who have faced government-ordered business interruption caused by a virus are gradually coming on the market to address the need.
Rooney Insurance Agency, Inc., headquartered in Tulsa, OK, has provided insurance solutions to businesses both locally and in several states across the USA since 1960. For more information about the firm and its capabilities, please visit www.rooneyinsurance.com.
