Business Interruption Insurance > Additional Costs
In this series of posts, we’ve covered the basics of Business Interruption Insurance, including an explanation of how much you need and the contingencies of these policies. In this final installment, we’ll cover the need for this insurance as it pertains to increased operating expenses.
Recovering from a disaster is a time-consuming task. Like we’ve mentioned before, suffering a natural disaster means that almost half of business won’t reopen. Even with insurance coverage, there are a lot of details that might not be covered. The most important thing to consider is increased operating expenses. If the building was damaged by flooding and had to be evacuated, chances are you’ll need a temporary space to run the business. This includes additional rent payments and even paying employees more to help repair the damage and get the building back in working order.
According to Supply Chain Drive, consider the following:
- Renew business as quickly as possible: conduct inventory assessments, identify alternate suppliers and maintain sufficient insurance.
- Have a plan in place to ensure equipment is safe and operational (or know where to find replacements or sub-contractors).
- Determine recovery time objectives and how to meet them.
- Determine what must be accomplished before the premises are safe for return.
Get in touch with all of the stakeholders of your business as soon as possible. In order to restore the business, operations must go on as usual. Identifying what needs to be replaced immediately can make the insurance claim filing process more efficient.
Because of the potential for damage, ensuring your business interruption insurance has a feasible limit for increased operating expenses will protect your bottom line and allow you to reopen and sustain your business for years to come.
About FGIB
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for financial entities, in addition to providing crime insurance and general business insurance products to a number of firms across the United States. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.