Business Loss of Income Coverage is an addition to a Commercial General Liability Policy. It can be added to a Business Owners Policy (BOP) for as little as a few hundred dollars, depending on the size of your business. It covers the loss of income from damage to your building that results in a slow down or suspension in business. For many business owners; this coverage may not seem all that necessary, but when an incident occurs this coverage can many times be the difference between a business reopening or closing for good.
The most basic way a need for this coverage occurs is when a building catches fire. When this happens, the general liability and commercial property policies will cover a businesses expenses to repair the building to its previous condition. These policies will not pay to cover loss of revenue if your business is slow or suspended for an extended time. This can be thousands of dollars depending on how long your business is closed.
As a business owner it is important to realize that a Business Loss of Income Policy only kicks in if the loss is a covered loss. Meaning that if the loss occurs from something like an earthquake or flood; and the business does not have special coverage for that peril, than the business loss of income policy does not kick in. This is important to note in areas that have natural disaster risks. Examples of this are Florida for hurricanes, California for earthquakes, Missouri for tornadoes, everywhere for flood risks. Another risk that is associated with Business Loss of Income is Data Breach. When a data breach occurs it very likely can cause you to be closed for a certain amount of time while the data breach is dealt with. If you have Data breach Coverage in place than this will be a covered peril. If not the Business Loss of Income will not kick in and you are liable for the additional loss of revenue.
When a business owner decides to add this coverage the important thing to consider is how much risk you are willing to take and determine if that risk is worth the amount you save in premium. For most businesses this coverage can be added for a few hundred dollars. If it is added to a business owners package it can be even less. In most cases this cost is well worth the benefit you get when an occurrence does happen. In most instances, when a devastating accident occurs and a business does not have this coverage, the chances of them ever reopening are far less than if they have this coverage.