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Fire & Water - Cleanup & Restoration

3 Losses Covered by Business Interruption Insurance

10/27/2021 (Permalink)

Wet carpet in office building. Storm damage in a commercial buiding Rain storm-damaged office building in Downtown, NV.

Three Different Types of Coverage an Interruption Policy Offers

While a base insurance policy covers the damage done to a building, they often do not cover the cost of lost revenue. Business interruption insurance pays for various costs associated with each day that a building is unused during a rebuild or repair. Here are three different types of coverage an interruption policy offers.

1. Contingent Business Interruption

CBI coverage pays for income loss related to damaged property owned by others relevant to your business. These are suppliers or receivers that you have a history with. The damage needs to be a relevant event from the coverage offered by your policy. For example, if your plan only has storm damage, the supplier would have to be affected by storm damage for the policy to be actionable. CBI coverage secures your operations from a supply chain disruption.

2. Actual Loss Sustained

As the most basic feature of a business interruption policy, the actual loss sustained covers the damage from an interruption to operations from a covered event. If the damage is severe enough to merit rebuilding or repair over an extended time, the insurer will pay for income loss for your closed business up to the policy limit. This covered period goes from the day the damage happens up until the repair service by a timely, professional commercial damage restoration company finishes.

3. Service Interruption

When utilities are damaged, it may not be an easy fix. Equipment, substations or line routes on your business property may suffer damage that makes the service otherwise inoperable. These can be covered if on your property and with the appropriate policy. The damage must be from a peril that your insurance policy covers.

Insurance can be enhanced to account for everything from a period of closure for your business in Downtown, NV. A potential rebuild doesn’t have to make you consider permanently shutting down your business. With adequate coverage, your business building and operations are secure from severe loss.

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