Loss of Business Income refers to the net income that would have been earned or incurred if a disaster affects your business, such as a flood or fire. Keep in mind, Loss of Business Income is only paid on covered losses. Therefore, if you have a loss that would be excluded under your policy, like a flood, loss of business income is not covered.
Your Loss of Business Income will usually be the last reimbursement you receive from your insurance company. The reason for this is because they don’t know what the amount should be until you’re back in business.
When coming up with what you get back, your insurance company will request records from you for them to compare to determine the actual business loss. Items you will be asked to share are your profit and loss statements, tax forms and payroll records. With that in mind, make sure you keep good records, because if you don’t it will end up being very difficult to prove your loss.
Payroll also qualifies, as long as you need the services of your employees while you are down from a loss. If you don’t need them, their payroll isn’t covered under the Loss of Business Income, even if you choose to keep them on payroll.
If you should decide to not reopen after a loss, you will be paid based on the amount of time it would have taken to resume operations as quickly as possible. As always, remember to report your claim quickly and provide all documentation requested.
Do you have more questions about Loss of Business Income? Give us a call!
Another way your policy may be written is with an Actual Loss Sustained basis. Watch for my blog next month to learn more about this or give me a call to learn more today!
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