Business Interruption Insurance in Massachusetts

What is Business Interruption Insurance?

Serious disasters can have devastating consequences, and sometimes those consequences last long after the initial disaster itself is over. Depending on the damage and destruction caused, negative effects can last for weeks, months or years. Business interruption insurance helps businesses in Massachusetts survive covered periods that follow certain disasters.

Business interruption insurance is a highly specialized type of commercial insurance. Instead of safeguarding property or protecting against liability lawsuits, this insurance normally guards against sustained revenue decreases that follow covered disasters. For businesses that go through these challenging times, the assistance that’s provided is sometimes the difference between eventually reopening and remaining permanently closed.

What Businesses in Massachusetts is Business Income Insurance Appropriate For?

Many Massachusetts businesses that would struggle to pay recurring bills while they recovered from a disaster could potentially benefit from having business income insurance. A few such businesses include:

Hotels, motels, and bed and breakfasts that would take a long time to rebuild
Restaurants and bars that might see decreased traffic for some time after reopening
Manufacturers that might not have inventory to sell following a disaster
Resorts that might have fewer tourists visit in the season following a disaster

What Sorts of Disasters Do Business Income Insurance Policies Cover?

Business income insurance policies generally cover the same sorts of disasters as commercial property policies do. For example, a policy might insure against revenue decreases that come after a fire, windstorm or major burglary takes place.

As is true with commercial property policies, however, the precise disasters that a particular business income insurance policy covers are determined by that policy’s terms and conditions. Businesses can get more details regarding a specific policy’s protections by reviewing that policy’s terms and conditions with an insurance agent who specializes in this form of coverage.

Are Marketplace Crashes Covered by Business Interruption Policies?

While business interruption policies cover many potential risks, marketplace crashes, increased competition and similar business issues normally don’t fall within their protections. These policies usually limit their protections to physical perils.

How Long Do Business Interruption Policies Make Payments on Covered Claims For?

Business interruption policies can be categorized according to how long they’ll make payments for when an insured business is impacted by a covered disaster. There are three main categories of policies:

Standard Business Interruption Policies may make payments until a business reopens
Extended Business Interruption Policies may continue payments for a set period after a business reopens
Contingent Business Interruption Policies may extend payments to disasters that impact key suppliers

What Package Policies is Business Interruption Coverage Available Through?

Business interruption coverage may be purchased on its own through a stand-alone policy, or it can usually be included in a business owners policy or a commercial package policy. Business owners policies are basic package policies that many small businesses use. Commercial package policies typically offer more customization options and broader coverages, and they’re commonly used by businesses that have more advanced insurance needs.

Should Businesses Self-Insure Against Prolonged Revenue Decreases?

While it’s often helpful to have some cash reserves available in an emergency fund, fully self-insuring against prolonged revenue decreases normally costs a business. When large sums are kept for a potential emergency, those funds can’t be used to grow a business or pay off debt. In most situations, paying a reasonable premium for business interruption coverage is preferable to storing up large stockpiles of funds for potential emergencies.

How Can Massachusetts Businesses Get Business Interruption Insurance?

For help finding business interruption insurance that’ll provide your business with the income protection it needs, contact the independent insurance agents at Haberman Insurance Group. Our agents have helped many Massachusetts businesses procure this coverage, and we’re here to assist your organization as well.