Business income is a coverage you can find on a commercial policy that will pay you income lost due to a business shut down due to a covered loss. The last two words of that sentence are probably the most important.

I have been involved in a number of conversations with clients recently asking if this coverage will kick in. I was asked today if this coverage would kick in due to shutdown because of the coronavirus. I’ve been asked if this would cover if income dropped due to road construction. I have also been asked if it would cover if business shut down because of smoke from forest fires. The answer to all three is “no”.

Fear is not a covered loss. Neither is construction or environmental factors. The most common loss when this would kick in is a fire or water claim. If your business cannot operate due to a fire, you will receive your average monthly receipts while you are down. Same with a covered water loss such as a burst pipe.

There may be a waiting period before this coverage is available. It is not uncommon for that to be 72 hours. Sometimes this coverage will max out at 6 months and some policies will extend as far as 18 months. As always, it’s best to consult your agent about the details of coverage on your policy.

Links

My Website

Music by Roger Clyne and the Peacemakers

Simply Explaining Insurance on ITunes

Simply Explaining Insurance on Spotify.

On Stitcher

On Android use Podcast Addict and search for Simply Explaining Insurance.

The post Simply Explaining Insurance #122- Business Income appeared first on Dietz Agency.