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Do You Need Business Interruption Insurance?

The Federal Emergency Management Agency (FEMA) has found that nearly a quarter of businesses do not re-open after a disaster. This highlights the importance of having an effective disaster preparedness plan in place to ensure business continuity.

Our property damage lawyers understand the importance of business interruption insurance.

What Is Business Interruption Insurance?

Business interruption insurance (also known as business income insurance), is a type of policy often part of a business owner’s insurance. It is designed to protect companies from the financial losses that can occur when a natural disaster or other event causes damage to their business. 

A business interruption insurance policy can help cover for:

  • Salaries and wages
  • Benefits costs
  • Rent
  • Relocation expenses
  • Costs of replacing inventory
  • Monies to repair or replace things like fixtures, furniture, cases, etc.
  • Overtime pay needed to rebuild the business
  • Advertising costs to notify customers of new locations or new opening date
  • Lost revenue and profit

With this policy, businesses are better prepared to handle unexpected events that could otherwise put them out of business.

The main goal of companies having business interruption insurance is to file a claim and receive full financial dues following the submission. This implies that they will be back in the same spot they were before the event occurred.

Business interruption insurance not only protects you from loss of income but can also cover any extra expenses that may be incurred due to an unexpected event. This helps keep businesses running and minimizes losses. 

Some of these extra expenses a business interruption insurance policy can have include:

  • Renting a temporary location for operations while the permanent site is under renovation.
  • Replacing hardware, technology, and furniture.
  • Overtime payment to current staff or hiring more employees.
  • Leasing equipment.

Do You Need Business Interruption Insurance?

Getting business interruption insurance can be a really smart choice if you are a small business owner as it can help protect you financially in the event of an unexpected disruption to your company’s operations. 

It can be a crucial coverage if your business relies on its physical location such as its building, or on assets like a bakery’s machinery or equipment that could be affected by problems. Such businesses include restaurants, retail stores, salons & spas, dog groomers, and yoga studios, among others.

There are many reasons why a company would get business interruption insurance, it can be highly beneficial in certain unforeseen circumstances. It is therefore wise to review such scenarios before deciding on whether or not to invest in this coverage.

business interruption insurance


After a fire, businesses often face the difficult task of rebuilding and recovering from the damage. It takes time to assess the damage, create a recovery plan, and restore operations. In addition to physical repairs, businesses will also need to adjust their processes, procedures, and systems to recover quickly.

Natural Disasters

If there was a natural disaster in your area, businesses can struggle to recover from the aftermath. City infrastructure, equipment, and customer base can all be affected by a sudden event such as an earthquake, flood, or hurricane.

Businesses must take steps to rebuild, protect their assets and ensure that their operations are resilient against future disasters

Machinery Breakdown

If your business has a machinery breakdown, this can be a significant disruption to your business operations, resulting in a serious loss of productivity and decreased revenue. 

Water Damage

Water damage can be a catastrophic event for any business, and the resulting financial losses can be immense. If you have an income insurance policy in place, it can provide much-needed financial relief during the recovery process and help to minimize the impact that such an event has on the business.


Cybercrime threats are a serious issue that every business can face. From identity theft to fraud and data breaches, cybercriminals can target your business and cause irreparable damage.

Business interruption insurance can help if you are a victim of cybercrime.

How Much Coverage is Needed?

Determining the right amount of coverage for your business often relies on predicting future profits, for which you should use the business’s gross earnings and projections as a benchmark. This is a good guide to follow when making such decisions. 

A key aspect to remember is that if any other business-related costs come up that surpass the coverage amount selected, it would be the responsibility of the owner to pay for them out of pocket.

Speak to Our Business Interruption Attorneys Today!

In conclusion, obtaining business interruption insurance can provide essential protection for businesses against unexpected events that may disrupt their operations and financial stability.

If you need to file a business interruption claim we can help you determine your options based on your insurance coverage. We will investigate, negotiate, and litigate your case to get you the results you deserve. 

Schedule your free case review today with our top Florida property damage attorneys. When insurance companies fail, Klotzman Property Damage Law succeeds. 

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