Business Interruption Insurance: Why Do I Need It?

According to the  Federal Emergency Management Agency, 25% of businesses don’t reopen after a disaster. Adventure sports businesses regularly face several risks that could necessitate a temporary shutdown or reduction of operations, both of which can have devastating effects. Business interruption insurance can play a key role in ensuring operations resume following a catastrophe.

What is Business Interruption Insurance?

Business interruption insurance, or business income insurance, provides a financial safeguard against temporary revenue losses and extra expenses resulting from covered business shutdowns. For example, if a fire or a vandal damages a business’s building and leads to a temporary closure, business interruption insurance can provide financial assistance while the building is shuttered for repairs.

Commercial insurance coverage is designed to protect outfitters from losses that can arise while on the field or when the business is closed after hours. If the company has adequate commercial adventure sports insurance and experienced a covered loss under the policy, their income will continue while repairs are being made.

Why do Outfitters need Business Interruption Insurance?

Small business shutdowns created by  unforeseen events  can have significant financial ramifications. In these circumstances, business interruption insurance can provide coverage for the following:

• Lost income: Business interruption insurance can help replace the revenue a business would have generated if it did not need to close temporarily.
• Continued operating expenses: Business interruption insurance can also provide financial assistance to cover standard, ongoing operating expenses such as salaries, taxes, utilities and mortgage, lease or rent payments that are due during the impacted period.
• Relocation costs: Business interruption insurance coverage can also offer financial assistance for moving expenses if a business needs to relocate to a temporary office.

How do Adventure Sport Businesses obtain Business Interruption Insurance?

Business interruption insurance is typically bundled with commercial property and liability coverage for adventure sports businesses. It’s essential for businesses to review their existing coverage to determine if business interruption insurance is included.

We’re Here to Help With Unexpected Disruptions

Business interruption insurance can provide crucial financial assistance in the chance they need to temporarily shut down or reduce operations. For more information on this type of insurance and risk management planning,  request a free CBIZ Adventure Sport Insurance quote.

This blog may contain scenarios that are provided as examples only. In an actual claim situation, coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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