A major loss not only causes material damage; it can also paralyze a company’s operations, affecting its revenue and reputation. Business interruption insurance is a key tool for maintaining financial stability in critical situations.
📘 1. Definition and scope
This policy covers loss of income and ongoing operating expenses when operations are temporarily halted due to a covered event (fire, flood, theft, etc.).
💰 2. Main benefits
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💵 Secured cash flow: payment of rent, payroll, taxes, and utilities.
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📊 Profit protection: prevents a pause from affecting your annual balance sheet.
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🏗 Covered additional expenses: relocation to another site, purchase of temporary equipment.
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🛠 Accelerated recovery: allows operations to resume without extreme financial pressure.
📍 3. Case study
A textile factory suffered a flood that forced operations to stop for 3 months. The insurance covered payroll, temporary facility rental, and allowed the company to maintain its client portfolio without major losses.
🗝 4. Key factors when purchasing
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⏳ Indemnity period: how long you will receive payments.
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📋 Accurate income calculation: prevents underinsurance.
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🔗 Integration with other policies: should be tied to your property insurance.
Conclusion
Business interruption insurance is a financial shield every business owner should consider. It doesn’t prevent the loss, but it does ensure the company survives and continues to grow.