Companies large and small know the importance of business insurance and the peace of mind it provides when the unexpected happens. While standard insurance is a must, what happens when a massive disaster strikes? Unfortunately, 25% of businesses cannot reopen after such an event.
Business interruption insurance provides an extra layer of protection for unforeseen incidents that bring business to a halt. From lost income to bills and taxes, this insurance helps cover fixed expenses while property restoration happens.
Top Causes of Business Interruption
A business interruption can happen for many reasons. Some of the most common that business insurance helps cover include:
- Natural disasters: Fires, earthquakes, hurricanes, and heavy rains that cause water damage can result in catastrophic property damage. Business insurance in Florida is especially important, as a hurricane can lead to property destruction.
- Technological failures: Technology allows for more streamlined workflows and enhances many aspects of business operations. Relying on machinery and technology also comes with significant risks when failures happen. It can lead to downtime and slow production or even necessitate a shutdown.
- Supply chain disruptions: Supply chains have long been a source of headaches for businesses. If a valuable vendor faces its own business disruption or other unforeseen events, it means expensive delays and costs.
- Cybersecurity threats: In modern times, businesses face the constant threat of a cyberattack. Along with the fact that the global average data breach costs a business $4.45 million, such incidents often take months to fully recuperate from.
- Pandemics and health crises: Health-related crises can have a ripple effect on businesses, as they impact the workforce. While remote work helps, some businesses cannot survive without a full staff of employees on site.
- Human factors: No matter how careful humans are, they still make mistakes. Whether breaking a vital piece of equipment or opening an email attachment with ransomware, even a small mistake can affect a business’s ability to operate.
- Regulatory compliance issues: As the world evolves, legislative changes frequently happen. Businesses could face extensive financial consequences if they do not adhere to new regulations.
- Political and economic instability: While politics may seem personal, governmental changes and instability can wreak havoc on businesses. Even economic or political crises in other nations can trickle down and affect a U.S. business.
- Infrastructure Failures: Although the United States is focused on fixing critical infrastructure, that process will take time. If these systems and structures get compromised, it can leave companies unable to conduct business.
Insurance Solutions for Business Interruption
Along with property and casualty insurance, business interruption insurance provides businesses with a safety net for major events.
When choosing business income insurance, it is necessary to assess all potential risks. A valuation is an important step in determining not only specific risks but also the financial losses that could occur. During the process, a business can develop a risk profile to help ensure they get the right coverage and put a plan in place to better manage a disruption.
Business Continuity Planning
Operating in a connected business world opens the door to potential risks. From a cyberattack to supply chain issues, along with the brutality of Mother Nature, additional business insurance helps ensure businesses can survive the unexpected with resiliency.
About The Hilb Group
Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.