June 11, 2009
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Most companies are well aware that insurance exists to help them recover property damage. If there is a disaster, many businesses can rebuild their buildings and replace their office equipment. However, many companies are unaware that insurance exist that can help a company recover lost profit in the event of a disaster.
Business Interruption insurance compensates for time that profit is lost due to the damage of property. It is designed for those situations where the loss at or of the site directly causes a loss of income. So, if your location is critical to your ability to produce revenue, then business interruption insurance is truly vital.
Businesses most in need of this kind of insurance include manufacturing, wholesale, and retail businesses. This is due in part because the ability of that business to produce profit is almost entirely tied up in its equipment and location. Business less affected would include many service businesses.
A few companies that offer Business Interruption Insurance:
• AIG
• FM Global
• IPI
Make sure the policy limits are sufficient to cover your company for more than a few days. After a major disaster, it can take more time than many people anticipate to get the business back on track. There is generally a 48-hour waiting period before business interruption coverage kicks in.
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