Deep down, just about every American dreams of opening a small business. Being your own boss carries a singular allure. But those of us who summon the courage to do so may not succeed.
Nearly one in five small businesses fail within the first year. And no matter how long you’re open after that, success is never guaranteed – not in the fifth year or the fiftieth. The unfortunate truth is that any substantial loss of income will likely be more than you can bear. Thankfully, you’re not powerless.
When tragedy forces you to close your doors, business income insurance can open them again. So, what is it and how does it work? Let’s dive in.
Everything You Need to Know About Business Income Insurance - A Guide
Over the last 50 years, Pepper, Johnstone & Company has safeguarded small businesses with insurance coverage for every budget. As an independent insurance brokerage, we can help you find as much or as little protection as you need.
Here’s what you need to know about business income insurance and why it’s a must for your enterprise.
What is Business Income Insurance?
Business income (BI) insurance covers a loss of income caused by covered perils (i.e., fire, wind, tornado, etc.) that cause physical damage to your building.
While commercial property insurance may replace damaged equipment or pay for building repairs, it won’t compensate businesses for the cost of closing their doors. This is where business income insurance comes in.
Why Do I Need Business Income Insurance?
Tragic events like theft and fire don’t just cost you once – they cost you again and again for each day that you can’t operate.
With building repairs averaging six to twelve months, you could be facing a whole calendar year without income. Even if you recover your material assets, no business is designed to shutter that long.
Ultimately, reclaiming lost income can make the difference between a permanent closure and a triumphant reopening.
What Does Business Income Insurance Cover?
Business income insurance not only replaces lost income but some everyday expenses, too. Depending on the details of your coverage, BI insurance may replace:
- Payroll
- Loan payments
- Mortgage/Rent payments
- Relocation costs
- Lost income
How Does Business Income Insurance Work?
Business income insurance covers lost income and other expenses for up to 12 months. Some carriers allow up to an additional 90 days after the 12-month period, for an additional cost.
Most businesses can’t afford to close their doors for even one day, let alone a week or more. Together with other forms of commercial coverage, BI insurance can act as a safety net – catching your business from failure when it needs it most.
What is Extra Expense Coverage?
Many small businesses can’t afford to close their doors – not for an hour and certainly not for six months. Extra expense coverage gets you back up and running faster for reasons up to and beyond lost income.
Any interruption could cost your small business a certain percentage of the local market share. Even if you recover in a few months’ time, it may be too late to keep your loyal customers, your vendors, and your presence.
Extra expense coverage prioritizes reopening quickly and can compensate business owners so that they maintain more than just income. For instance, extra expense coverage can provide funds to secure a temporary building to resume operations elsewhere, while your main building is being reconstructed.
Who Needs Business Income Insurance?
Every small business deserves a second chance, especially those impacted by tragedy. Everyone from brick-and-mortar retailers to software companies can benefit from the protections that BI insurance offers. There’s simply no other replacement for operating days, steady sales, and a growing customer base.
Interested in Business Income Insurance?
Some things in life are too important to be left up to chance. That’s especially true of the sweat equity and money you’ve invested into your small business. America needs every small business it can get, and if we have our say, no fire or catastrophic storm will force a business to close its doors permanently.
To find the coverage that works for your small business, call Pepper, Johnstone & Company today at 866-872-0431 in Athens, AL, or 866-872-0431 in Huntsville. Together, we can keep America’s small business community strong.
Protect Your Small Business. Call Pepper, Johnstone Today.
Keep your staff, rent, and loans paid while getting back on your feet quickly. Business income insurance is an absolute must across industries. No matter how long you’ve been in business, no matter how successful you are, you could be one closure away from never opening again. Let’s get you protected so that you can get to work.