Business Interruption Coverages ~ Know Your Coverage & Know Your Risk
A terrible fire destroyed most of Symons Valley Ranch market this morning, and it got the professionals at Action Insurance Group thinking about how to help educate and protect our clients from experiencing a further loss in the midst of total devastation!
Did you know? During the Fort McMurray Fires, approx. 70% of the commercial losses did NOT have any form of Business Interruption insurance included in their policy. This news came from one of Canada’s largest Insurer with a huge commercial presence in Fort McMurray, Alberta.
If you have considered the possibilities of what can go wrong and how severe this would be then you have an idea of how the insurance would benefit you. If you had a major claim and it took six months or more to rebuild and get your doors back open for business, would you lose many of your customers? Would they be quick to come back or would business trickle back in over time? Do you have some employees that you really want to keep?
Avoiding claims is always preferred to having to deal with a large loss. Having bought the right coverage before the claim occurs is much better then realizing that you do not have the resources you need to get back in business and profitable. The wrong choice might mean that you will end up closing your doors and worse yet, be in a deficit position.
The costs for this coverage are minimal. Subject to operations, claims history, and a few other variables. I can tell you personally from supporting clients with commercial claims, if we did not have the business interruption coverage added, the situation could have been a whole lot worse for all parties of interest, specifically our client! At Action Insurance Group, advising our clients of the benefits for Business Interruption Coverages is a standard and our duty, putting our customers best interests at the forefront.
*Coverage In Action, Real Life Examples*
§ Fire/Evacuation – Claim $62,750 (Loss of Income)
An apartment building tenant was making toast at lunchtime when the smoke triggered the fire alarm and fire in sued with damages throughout the building. Our client’s bakery’s retail and manufacturers operations, located on the ground floor of the building was subsequently evacuated by the fire department and immediately closed until a safe return could be restored. As the bakeries owner lost lunch-time sales and wholesale business sales, they submitted a $62,750 claim to the Insurer for the loss of business income. The insured received the full amount of his claim without having to pay a deductible, as stipulated in his insurance policy. The Insurance came to an agreement to recover the sums from the landlord’s insurer, who was liable for this unfortunate situation.
§ Power Outage – Claim $27,000 (Loss of Income)
A vehicle collided with a utility generator causing a power outage and the closure of several businesses. Our client, who owns a Pizza Restaurant near the site of the collision, was forced to close his business for 4 days, thus losing significant business income. The insured claimed $27,000 for this business interruption. As the merchant’s insurance policy included coverage for loss of business income caused by an off-site utility interruption, he was compensated for the losses related to this incident. After a discussion with the client and an analysis of the loss of income, the Insurer paid him $26,000 with the $1000 deductible enforced. (Citation: Zywave, Liberty, Desjardins)
Any questions or additional details, please contact our Commercial Insurance representatives at Action Insurance Group at (403) 457-1000.