Do You Have This Vital Insurance Coverage for Your Small Business?

Anyone running a small business needs to make sure they have the right insurance coverage. This includes liability insurance in case the company is sued. It also includes property insurance in case there's damage to the building or equipment the company owns or rents.

In addition to these types of protections, there's one type of insurance coverage every small business needs.

Companies need business interruption insurance

Business interruption insurance, or business income insurance, is a vital type of insurance protection that small business owners should make sure they put into place.

This type of insurance provides coverage in situations where a business is temporarily unable to operate for some reason. For example, if the company headquarters burns down or if a tree falls on the building that customers visit to buy goods or services, the company may not be able to continue operations until the issues are resolved.

It can take weeks or even months to get back to normal operations when something goes wrong at a company. And, sadly, many businesses -- especially newer companies -- may simply not have the funds to go weeks without income coming in.

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Without business interruption insurance, a company might have to lay off all of its employees because it can't afford to pay them indefinitely until things get back to normal. This could undermine the future effectiveness of the company. The business could also not be able to continue to pay rent or other costs, and could be forced to close its doors due to a period of no income.

Business interruption insurance is there to make sure that doesn't happen and the company can weather the storm.

Here's what business interruption coverage will pay for

Business interruption insurance pays for many important things in circumstances where a business is temporarily unable to operate due to a covered cause. Some examples of different things that this kind of insurance policy could pay for include:

• Lost revenue that the company cannot generate due to its closure, which it would have likely made had it been able to remain open.
• Rent, lease payments, or a mortgage payment on the location where the company operates.
• Loan payments the business would ordinarily need to make during its normal operations.
• Taxes the company owes to the IRS on a quarterly or monthly basis.
• Payroll for workers.
• Costs of relocating a business either temporarily or permanently if opening back up in the current location becomes impossible.
• Training costs if staff members must learn how to use new machinery or equipment after the old equipment is destroyed by a covered cause.
• Any additional expenses that result from the interruption of normal operations, such as renting another space to operate in temporarily or advertising to customers that a business has relocated if it is not able to go back to its initial location.

You need to be able to get these costs covered if you can't keep operations going -- so be sure to sign up for business interruption insurance if you haven't already. You never know when something will go wrong, and you don't want your company's success to be derailed because of bad luck that interrupts business.