Business Interruption Insurance
Guardian Insurance Agency
When operations stop, cash flow shouldn’t.
Business interruption (BI) insurance—often called business income—helps replace lost income and pay ongoing expenses when you’re forced to shut down due to a covered physical loss. It keeps payroll going, rent paid, and plans intact while you repair and reopen.
What Business Interruption Insurance Covers
(Exact terms vary by carrier and policy—we’ll tailor limits and endorsements to your operations.)
- Lost Business Income: The net income you would have earned if no loss occurred, plus continuing normal operating expenses (e.g., rent, utilities, some payroll) during the restoration period.
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Fixed Obligations:
- Loan payments that come due during downtime.
- Mortgage, rent, and lease payments.
- Payroll (often scheduled or limited—structure matters).
- Taxes owed during the shutdown.
- Extra Expense: Costs above normal that help you reduce downtime and resume operations sooner—temporary relocation, expedited shipping, leasing equipment, overtime, and short-term staffing/training.
Key mechanics: BI typically requires a covered cause of physical loss at your premises (fire, wind, burst pipe, etc.), a waiting period (often 24–72 hours), and ends at the earlier of repair completion or when you reasonably could resume operations. We’ll size your limit to the realistic time you need to rebuild and ramp.
Contingent Business Interruption (Dependent Properties)
Sometimes your suppliers, buyers, or key service providers are the ones hit. Contingent BI covers lost income when non‑owned locations suffer a covered loss that disrupts your operations—for example, a fire at a supplier that halts deliveries, or damage at a contract manufacturer. We’ll map supplier/buyer lists and set the right limits and named dependencies.
Civil Authority Coverage
If a government order blocks access to your premises due to physical damage at nearby property, BI may respond for a limited time (subject to waiting periods and time limits). Wordings differ—some include ingress/egress even without an order. We’ll align this with your local exposure and recovery timeline.
Utility Services & Off‑Premises Power
Operations can stop without damage at your site—power, water, gas, or communications go down. Utility Services/time element endorsements can address lost income when critical services fail due to damage away from your premises. Some forms also include direct damage caused by utility loss (e.g., food spoilage). We’ll confirm on/off‑premises triggers and sublimits.
Common Options to Strengthen Your BI
- Extended Period of Indemnity: Income protection after repairs while you ramp back to normal.
- Ordinary Payroll Limitation vs. Sustained Payroll: Decide how long you want to carry staff during downtime.
- Ingress/Egress: Coverage when roads are closed and access is blocked.
- Leader Locations / Attraction Property: Income loss if nearby draw locations are damaged.
- Seasonal/Peak Season Adjustments: Higher limits when revenue spikes.
- Spoilage & Equipment Breakdown: For temperature‑sensitive stock and machinery failures.
What BI Usually Doesn’t Cover
Some risks need separate policies or endorsements:
- No physical damage trigger at or near the described premises (policy dependent).
- Exclusions like flood/earthquake unless endorsed; utility failures without proper endorsements.
- Pandemic/communicable disease (commonly excluded; special forms may exist).
- Losses beyond the restoration period or beyond chosen time limits. We’ll read the fine print and close gaps with property, flood/quake, equipment breakdown, utility services, and contingent BI where needed.
How to Right‑Size Your BI Limit
We’ll work through:
Revenue model:
verage daily/weekly/monthly net income and continuing expenses.
Realistic downtime:
Repair/replace time + lead times for materials and permits.
Ramp‑up period:
Time to regain customers, inventory, and workflows.
Waiting periods & coinsurance:
Structure to avoid penalties; consider extended indemnity.
Dependencies:
Suppliers, buyers, and utilities that drive continuity.
The Guardian Way
We analyze your leases, contracts, and financials, size income and expense coverage, and add contingent BI, civil authority, ingress/egress, utility services, and extended indemnity where your operations need it. Then we help document losses fast—so claims pay cleanly and you reopen sooner.
Guardian Insurance Agency — Proper protection—prior to peril.
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