Business Interruption Insurance Is Essential

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Imagine this dream scenario: After years of working for other Southwestern Art merchants, you are finally ready to open your own store. You have studied hard learning all there is to know about not only your wares, but also about how to operate a business.

The property was secured with little trouble in one of the busiest commercial areas in your Colorado metropolis. So far you've been able to follow your business plan perfectly and your funder is pleased. You are insured against property loss, fire, flood, etc. Your merchandise is tagged for sale and ready to go; the window display is perfect; your marketing campaign has been underway for some time now and the community is well aware of your arrival. In fact, record numbers of people attended your grand opening celebration yesterday.

Here comes the nightmare scenario: You've been in business for several months now and things are going very well. The commercial laundry next door went up in flames overnight and took most of the shopping center with it, including your place! You have fire insurance, so you should be okay, right? Think again.

Although your merchandise is covered for loss, what about your loss of income and the lack of cash flow that comes as a result of not having any money coming in while rebuilding is going on? Every business should carry some kind of business interruption insurance to prevent the utter collapse of affairs and help it weather the reconstruction storm and come out on the other side intact.

Business interruption insurance will compensate you for lost income due to disaster or any other type of mishap that causes a temporary stop to normal business transactions and a need to vacate the property. You will also be compensated for normal overhead expenses that continue despite the cessation of business, and the costs of moving your business to a temporary location if that's a feasible option.

Extra expense insurance is a desirable addendum to business interruption in that it will reimburse you for yet more unexpected costs that may come while you try to keep your head above water and allow you to remain in business when the storm is over.

An insurance professional will have you fill out a business interruption worksheet where you will break down the numbers on your business into categories. This will help you to determine how much insurance you should buy based on your accounting figures.

When in business, the old saying definitely holds true: hope for the best but prepare for the worst. When you have business interruption insurance, you will be able to breathe a little easier knowing that you will still be in business after disaster strikes.


About the Author:
If you would like a business interruption worksheet as a first step toward protecting your livelihood and for more information on business interruption insurance, contact the expert professionals at Kinsel Accountancy Corp (http://www.kinsel.com). Art Gib is a freelance writer.



Article Originally Published On: http://www.articlesnatch.com


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