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Did You Know - Loss of a Key Employee

Did You Know...

If a loss caused your business to shut down for an extended period, your policy may not provide the income to continue payroll for key employees?

As a business owner, you are probably aware of the importance of insuring your building and its contents against any disaster.  But have you taken steps to insure your income?   If a tornado  or other tragedy interrupts your business operations, lack of income will be one of your greatest losses.  It is essential not to overlook the need for business income insurance, one of the most valuable insurance coverages available to your company.

A business income policy is activated when daily operation is suspended due to a covered peril, such as a storm, fire, explosion, or other disasters.  The insurance is designed to provide the income that your business would have generated under normal circumstances, making it possible to meet fixed expenses such as rent, utilities, loan payments and payroll.

While business income policies vary, most limit coverage to an interruption caused by direct physical wreckage, by a covered peril, or to property at the insured site.  In most instances your policy would carry extra expense coverage, in which case your insurer would also pay any expenses incurred to hasten your recovery or otherwise reduce your loss.  The Insurance Services Office (ISO) has two business income forms- one with extra expense coverage and one without.  You may also purchase extra expense coverage by itself.

Since you cannot predict when you may need to file a business income claim, the next best thing is to be prepared for it.  Knowing the proper actions to take in the wake of a catastrophe can expedite the claim process and spare you a great deal of aggravation.

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