Many business owners are concerned about the potential losses that could happen to their business, but they don’t often think about the resulting loss of income. A fire, tornado or theft can cause substantial damage, but what about the lost income for the next 6, 12 or 18 months? This can often dwarf the initial claim.
What Triggers Loss of Income?
Your location, generally, has to of suffered a covered loss for loss of income to be paid. For example, a fire breaks out in the kitchen of your restaurant. Your restaurant will be closed for likely many weeks or months. You will have many expenses that continue on, such as rent, taxes, payroll, utilities and many other expenses. Without adequate loss of use coverage, your business would likely suffer to a point that it could never return.
Most business insurance policies automatically include 12 months of loss of use. However, it’s worth looking into additional coverage. With the amount of building codes and regulation, especially on commercial buildings, it can take many months to rebuild and reopen after a claim. 18 months or even 24 months are a great option. Lost of use coverage rarely has a separate dollar deductible, but it does normally have a time deductible. This means that after a covered loss, you might have to wait 24-72 hours before loss of income kicks in.