If you have a Business Owner’s Insurance Policy (BOP), you most likely have Loss of Income Coverage automatically included in your policy. This coverage provides exactly what you think it would. It covers your loss of income if you have a covered claim that prohibits you from being able to operate in your current location, such as a fire.
The Insurance Company will pay for your loss of income from the date of your claim, with a small time period deductible to the date that you are able to open your doors back up and operate from your location or similar location. This is an important coverage that every business that is dependent on a location should have.
Loss of Income is an important coverage that helps businesses get back on track after they suffer a major claim. There is an endorsement that I recommend, that makes the Loss of Income Coverage even better…it’s Full Resumption of Operations.
Loss of Income will cover your loss of income until the date that you are able to reopen your doors, Full Resumption of Operations is going to cover you for an additional period you select after you are able to operate again. Just because you open back up after a claim, doesn’t mean that your customers are going to come flooding back to you. You will most likely have lower income for a period of time after you reopen your doors. This is where Full Resumption of Operations comes into play. If you normally have sales of $100,000 per month, but the first month after you reopen, you only have $50,000, the Insurance Company would pay $50,000 to make up the balance. If in the second month after reopening you had sales of $75,000, the Insurance Company would cover the $25,000 deficit.
As you can see this makes the Loss of Income coverage even better. You’d be surprised at how affordable the Full Resumption of Operations endorsement can be. The bulk of the premium is charged for the Loss of Income Coverage, so the additional endorsement doesn’t cost that much more. I was recently working on a business insurance quote and checked the box to add the Full Resumption of Operations endorsement for 60 days and it actually didn’t increase the premium at all! This will obviously vary for each business but gives you an idea of how affordable it can be.
I hope you found this tip helpful. If you’d like us to review your insurance and provide you with a no-obligation quote, give us a call 585-663-2004.
