Part of protecting your business is getting the right insurance coverage. At the least, you have general liability and workers' compensation. Others you may have purchased include commercial auto, professional liability and property insurance.

With all the natural disasters that happen in Florida, a vital area to add to your policy is business interruption. It is important to understand how this type of insurance works and ensure you have enough coverage before damage occurs.

What the policy covers

The purpose of business interruption insurance is to compensate you for the losses you incur while you cannot conduct business operations. It can also reimburse you for expenses such as securing a temporary office site. It normally only covers the time period between the event that caused your business to close to the time you reopen after repairs and renovations. The length may be shorter if your business is inoperable for longer than your policy's indemnity period. Likewise, if the losses exceed the insured amount, you may be responsible for the difference.

You may be able to include additional coverage in your policy. Extended business interruption lasts from the time past the date of repairs, but it ends before you return to your previous profits. Contingent business interruption covers loss from damage to those you do business with, such as your suppliers and clients. Other add-ons may be available, depending on your provider.

Tips for filing a business interruption claim

As with any type of insurance claim, the more details you submit, the better. You should include the following information:

  • The location of the property
  • An overview of the business (size, number of workers, hours of operation, goods or services)
  • Its financial history and current numbers
  • A timeline of what happened
  • A description of the damage and how it affected operations

Keep accurate records of losses, expenses, inventory and communications during this time to submit to your insurer later. Every year, calculate your company's pre-loss value and review your policy to determine if your coverage is sufficient.

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