What is Business Interruption Insurance?

Business interruption insurance is a unique type of insurance. If a covered incident causes a business’ profits to diminish, a policy will help make up for the decrease. It will provide payment for the difference in income, according to the policy’s terms, conditions and limits.

Since business interruption policies provide payments for lost income, this type of insurance is sometimes called business income coverage.

What Kinds of Incidents Does Business Income Coverage Cover?

Generally speaking, business income coverage covers the same kinds of incidents as a building policy. Specific coverages vary, but many policies protect against incidents like fire, theft, windstorms, and similar perils.

One thing business interruption policies don’t usually cover is poor business decisions. If a business owner makes a strategic mistake that leads to decreased sales, a policy won’t help make up the different. This type of insurance is meant to protect against what businesses can’t control, and not what they can.

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What Businesses in New Jersey Could Benefit from a Business Interruption Policy?

Any business in New Jersey that wouldn’t be able to pay its bills if it suffered a significant or sustained loss in revenue may want a business interruption policy. A disaster won’t stop bills from coming due, and not being able to pay them could have a negative effect on a business’ credit and reputation -- and may even force a business to close.Protect Your Business

Some expenses may be covered by other insurance policies. For example, a restaurant in Princeton, NJ that has food contamination coverage might be reimbursed for any food that spoils following a covered disaster. Without a business interruption policy, though, the restaurant may not be able to pay its rent, utilities, or staffing expenses until customers start coming in again. These are the types of costs that a business interruption policy might help with.

Even businesses that have a cash reserve or line of credit that could help them survive a disaster may want a business interruption policy. Purchasing coverage, rather than self-insuring, lets a business use its financial capital and borrowing capacity for other purposes that might grow the business.

How Can Businesses Get a Business Interruption Policy?

Businesses in New Jersey may be able to get business interruption insurance through a business owners policy or as a stand-alone policy. To get quotes on both business owners policies that have business income coverage and stand-alone business income coverage policies, businesses should contact an independent insurance agent near them. 

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Can Your Business Recover from a Disaster?

When a business experiences a disaster, its losses can extend beyond any property damage it suffers. If a business is forced to stop or slow operations for any amount of time, its revenue -- and profits -- can quickly decrease. Business interruption insurance helps New Jersey businesses financially when they suffer a loss of income due to a covered claim.

Meet Your Industry Specialist

Jeff Kroeger

Principal, Senior Vice President, and Head of Commercial Lines, Mr. Kroeger also manages the company's hospitality book of business and is that unit's primary producer. He is a graduate of Montclair State University and was named a 2015 Young Gun Insurance Business America.

Jeff has been providing exceptional insurance for restaurants, bars, nightclubs, and more for many years. He understands the unique challenges this industry faces and delivers the right coverage at an affordable price.

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