At A.P. Reid, we consider consumer education to be one of our top priorities. An informed insurance buyer will made educated decisions about their insurance - ensuring that you avoid trouble down the road in the event of a claim. A.P. Reid customers benefit from the important information contained in our series of hundreds of Customer Information Bulletins. Below you will find a selection of these bulletins related to Business Insurance. Check back often as this selection will be updated from time to time.
When you operate your business, you generate income. With this income you pay all your operating expenses, interest on your loans, and your payroll. You, hopefully, generate a profit each year, with which you expand, reduce debt, and reward yourself accordingly for a successful year. All income, gross profit, and net profit is the result of the daily operating of your business, the carrying and selling of stock, and the maintaining of your business premises. Even the most successful of us spend our business income wisely – We don’t have “Money to Burn”.
A fire policy covering your buildings, stock, and equipment will protect you for the value of your business assets should they be destroyed by fire. Business Income Interruption Insurance gives you protection for the “reason you are in business”. Your cash flow, your current earning potential and your future business potential. You could be risking “burning your money” if you are not carrying Business Income Interruption Insurance.
If your premises were destroyed by fire, your income would reduce significantly or be eliminated totally until such time as your fire insurance responded and your premises rebuilt and restocked. For some businesses, this could be a short period of time, the business could move to a new premises, operate from a rented utility trailer, or some other short term plan. Stock can be obtained locally and quickly. For those businesses, full business interruption may not be a necessity. Other businesses will be shut down completely for an extended period of time, generating no revenues at all, but facing continuing expenses, if not increased expenses.
These expenses would have to be paid by the business owner. Your past profits, your past retained earnings, or future profits are all at risk of a fire. Those past profits, current earnings, and future profits are all insurable. Don’t risk having to commit your past success and your future success to paying continuing expenses while your business has been shut down by a fire.
Many a business has had to shut down permanently after a fire or other major disaster. They may have had adequate fire insurance, but they lacked the resources from past profits, and lacked the borrowing power against future profits to pay the continuing expenses while their premises were being rebuilt. These expenses made “going back into business” impossible. Business Interruption Insurance is the method we use to protect the business owner from having to use past profits or commit future profits.
What does Business Interruption Insurance do?
Business Interruption Insurance behaves almost as if it was your gross profit. You have funds available to pay all the operating expenses of the business that are continuing even though your business has ground to a half or almost half. When the amount of insurance is properly calculated, and the scope of business interruption insurance includes net profits, you should have your usual net profit leftover so that you can continue to pay your debt service bills. The concept behind business interruption insurance is to “leave you in the same position financially as you would have been had no loss occurred.”
BUSINESS INTERRUPTION INSURANCE is affordable! And, we can tailor the most appropriate form of coverage for your business operation. You can’t afford to operate your business without it. Let’s do some calculations for you today.