July 18, 2018

Business Interruption Insurance: Cost, Coverage & Providers (Fit Small Business) »

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Business interruption insurance, aka business income insurance, covers the lost income of a business that has to cease operations due to damage from a covered event under a property insurance policy, such as fire or wind. Pricing for coverage varies, but the average cost of business interruption insurance ranges from $750 to $1,200 per year.

Top Business Interruption Insurance Providers

Provider
Best For
Farmers Insurance
Full service business interruption coverage, including their Specialized Business Resumption Plan (BRP) that guides business owners through all phases of business interruption.
The Hartford
Businesses wanting a national provider that specializes in providing small business insurance solutions catered to their needs.
Insureon
Easy online application with access to multiple carriers to find the best coverage at the right price.
Nationwide
Specializes in commercial property insurance, the foundation of business interruption insurance.
Travelers
Businesses that want to add Extra Expense coverage, which provides more business interruption coverage.

Business Interruption Insurance Providers

The best insurance providers for business interruption insurance will be companies that include this coverage in a business owners policy (BOP), along with general liability and commercial property insurance. While it comes standard with a BOP, when bought on its own, business interruption insurance typically costs $750 to $1,200 annually.

Here are five of the best insurance providers offering business interruption insurance policies:

1. Farmers Insurance

The typical business interruption coverage won’t begin for 48 to 72 hours after a cease in operations is caused by a covered event. Keeping this in mind, Farmers Insurance helps guide their business customers through the first 48 hours with information on alternate business sites and contact information for key personnel.

Their Business Resumption Plan (BRP) acts as more than just insurance; it’s a plan to help you get back to business after a cease of operations. Farmers Insurance can be a smart choice for business owners who want added service in the initial 48-hour down time before business income coverage kicks in.

2. The Hartford

The Hartford is one of the best small business insurance providers in the nation, and their business interruption insurance is a primary offering in their extensive lineup of coverage types. Their business income protection comes in seven different types, including business income “extensions” for essential personnel, cloud service interruption, off-premises operations, and more.

Small business owners looking for a larger insurer that has a broad range of business income insurance offerings will want to take a close look at The Hartford, which is also known for their highly rated claims service.

3. Insureon

Insureon stands out as a leading online insurer that offers a wide variety of industry-specific insurance types in addition to their business interruption insurance coverage, which includes coverage for lost income, relocation, employee wages, taxes and loan payments due, and more.

Insureon is an online broker, which means you have access to several top-rated insurance companies to get the right coverage at competitive pricing. They are best for businesses that want to see several provider quotes side-by-side.

4. Nationwide

Nationwide is the best provider for commercial property insurance, which is the foundation of business interruption insurance. Their basic business income coverage can be expanded to include utility services damage in the event you have a power outage and loss of income due to a covered event such as high winds taking down a power line.

When your property is damaged or destroyed, and you need business income coverage, a large provider like Nationwide, which specializes in protecting commercial property, can be a wise choice. This is because business interruption insurance is an extension of commercial property insurance, and this expertise is a great asset to look for in a provider.

5. Travelers Insurance

Travelers Insurance offers Extra Expense coverage in addition to their business interruption coverage, and not every provider offers this extended protection. For example, if your business had to close for several days due to a fire, business interruption insurance would cover your lost income, while Extra Expense coverage would cover added expenses incurred due to running your business offsite.

If you need basic business interruption insurance plus the option of adding the Extra Expense coverage option, Travelers Insurance can be a smart choice for your business. Plus, they’re great for helping you with all the information needed to make the application process for business interruption insurance easy.

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To read more, go to FitSmallBusiness.com. And be sure to read below for our mention in the article.

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Who Needs Business Interruption Insurance

Businesses that rely on a physical location and assets, such as equipment or machinery, to generate income should have business interruption insurance. For example, service businesses, such as retail stores, hair salons, and restaurants, need their buildings to operate and generate revenue. These businesses need business income insurance.

Don’t overlook your potential need for business interruption insurance, according to Brad Plothow, VP of Brand & Communications, Womply:

“Our research suggests that one in five small businesses would shut down within 30 days if sales stopped, yet only 23 percent have business interruption insurance. This means any hiccup in cash flow can put the business at risk. For example, 67 percent of owners with less than a month of reserves consider floods, fires, and other disasters ‘extremely damaging,’ but only 14 percent have business interruption insurance to maintain cash flow during a stoppage. In general, business owners aren’t properly insuring themselves against risks to revenue.”

Bottom Line

Business interruption insurance, also known as business income insurance, is usually included in a business owners policy (BOP). However, small business owners who rely on their physical locations to generate income should still confirm they have this coverage and possibly consider increasing it. To be sure you have sufficient coverage from business owners insurance, speak with an insurance professional.

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