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Business Interruption Policies: What to Know if Your Small Business Comes to a Grinding Halt

As the world continues to habituate preventive measures against the coronavirus, many small businesses are starting to realize how external circumstances can adversely impact their operations in the long-term. Small business owners suffer as much as, if not more than, larger employers because along with the inability to serve customers in the same manner as before, indefinite business disruptions can severely impact their bottom line. One method that several small employers use to protect their businesses is turning to insurance (specifically business interruption insurance) which can provide coverage for any income that the business would have earned had it been running normally. This policy can also help pay for expenses like employee wages, taxes, rent, loan payments, and even relocation expenses.

But, there’s a catch. Be on the lookout for the fine print in any business interruption policy that you choose. The coverage is usually only available for losses that stem from a designated/covered peril. While covered perils include natural disasters, equipment damage and vandalism, these policies tend to be extremely specific. For instance, if the insurance policy requires a particular loss (e.g., an earthquake), coverage won’t be available for any other loss that is not explicitly stated.

Another point to note when dealing with business interruption policies is that they typically cover losses triggered by physical damage. If you’re trying to protect your small business from an outbreak of viruses or diseases, make sure to clarify what “physical losses” include, or you could end up feeling cheated. There are multiple ways to interpret these policies; talk with a broker or agent to determine how to get the best out of yours.

During times of crises, small employers like you will have a whirlwind of issues to deal with, from ensuring your team stays healthy and productive, to figuring out whether your business model may be in dire need of change. With all of that on your plate, you may feel tempted to just sign that policy and settle for whatever you get. But if you want to avoid getting the bad end of a deal in such a vital bargain, get in touch with the experts at NY Small Health to make sure your small business receives the protection it rightly deserves.

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