Business interruption insurance helps businesses cover unexpected losses of income that are caused by covered incidents. As is the case with most insurances, there are several different types of business interruption coverages. Here’s a look at three available coverages that Vermont businesses, depending on the nature of their operations, may want.
Vermont Business Owners May Want These 3 Business Interruption Insurance Coverages
1. Standard Business Income Insurance
Standard business interruption coverage is generally the most basic form of business interruption insurance. While exact protections can vary, it generally provides compensation for lost income until a business is restored to normal operations. Thus, a business that’s been affected by a covered incident may receive regular payments until its facilities are repaired and employees back to work.
(Policies may also have a cap on how long they’ll make payments for, stopping at the maximum duration even if operations aren’t back to normal. When a policy is well-selected, though, it’s timeframe for payments usually is long enough to recover from a covered incident.)
While this may be the most basic of these three coverages, it’s far from insignificant. Most businesses in Vermont, including everything from a small cafe in Burlington, VT to a large manufacturer in Brattleboro, VT, can benefit from this coverage. After all, most businesses can’t bring in revenue if an incident stops operations, and almost any business could have something happen.
2. Extended Business Income Insurance
Extended business interruption coverage normally extends the coverage afforded by standard coverage for a set amount of time. For example, a policy might provide 30, 60, or 90 days of additional payments after a business resumes operations (or beyond a standard policy’s maximum limit). The extended timeframe is established at the time that the coverage is purchased.
Extended coverage can be especially important for businesses that don’t immediately see their normal level of income after reopening. Businesses with long purchase cycles, such as manufacturers that sell to wholesalers, often fit this description. Additionally, businesses that don’t immediately see an influx of customers after reopening might also want this coverage. A restaurant for instance, might want 90 days of extended coverage to give the public time to
3. Contingent Business Income Insurance
Contingent business interruption coverage extends protection beyond a business’ direct operations. Depending on the terms and conditions of a policy, this coverage may provide payments if a key supplier’s operations are interrupted and affect a business. A policy's terms and conditions, of course, will define what qualifies as a supplier interruption that this coverage provides protection
Businesses that are reliant on one or more suppliers often get this coverage. A couple examples of businesses like these include stadium vendors that are contracted with a particular food supplier and manufacturers that rely on another company for parts. Should the food or parts supplier be incapable of providing vital supplies, coverage like this might provide compensation for lost income -- even if a business' facilities themselves are unaffected.
Get the Business Interruption Insurance Coverages for Your Vermont Business
To make sure you get the right business interruption insurance for your Vermont business, contact an independent insurance agent in the state. An independent agent who