At CLH, we like to think of Business Interruption Insurance (or Time Element Insurance) as Short-Term Disability for your company. For example, imagine you own a coffee house. You are very excited for this Friday night because, as a kick-off to your tenth year in business, you have scheduled a local live entertainer to play his acoustic guitar throughout the evening. You are sure this will add to the personal experience that your coffee house prides itself on and that tonight will build your company's reputation as a friendly and engaging establishment for all of its visitors. You have projected great business results for the night of the event and the weeks to follow.
So when a Thursday night storm wipes out power in the surrounding blocks, not overlooking yours, you're devastated. There is no electricity to turn your lights on, set up your entertainer's equipment, or even brew your famous coffee for that matter. But even if you could get the electricity up and running, there wouldn't be much room for your customers to visit with a tree, blown in by the storm, lying right through the front of your shop. It's going to take time to repair all of the damage that has been caused. And you don't even want to think about the cash flow that you no longer possess to continue paying your staff. You can't afford to have your trained baristas leave your business, but you are already worried you won't be able to afford to keep them either!
This is where your Business Interruption Insurance kicks in. As mentioned earlier, we like to think of it as a Short-Term Disability policy for a business. Your business (in this case, coffee house) is temporarily down. It can't bring in income or profit, but it still has expenses to pay (like your employee's wages) and you can't even get into the cost of repair just yet.
Business Interruption Insurance will pay business expenses and loss of income while your business is shut down due to a direct (covered) loss.
Three Reasons Why We Recommend Business Interruption Insurance
It's Necessary- How else are you going to pay your employees and repair your establishment when you have no income?
It's Different from Your Current Insurance Coverage- Your current business policy might cover physical damage incurred from an outside force. But what about the income (not to mention profits) you would have been bringing in during the rebuilding period had your company not suffered the loss?
We Have It and We Think It's Great- You can trust us when we tell you that, as a service-oriented business, we know how important it is to be able to continue to provide excellent service, even in the event that our building or equipment is damaged. We never want to be unable to help you when you need us. And your company should never be unavailable to your customers when they need you.
Do You Have a Disaster Recover Plan.pdf