Business Interruption Insurance in Massachusetts

What is Business Interruption Insurance?

Many disasters can have long-standing effects that impact a business far beyond when a disaster itself is over. Depending on the disaster and recovery needed, the costs to a business can last for days, weeks, months or even longer. Business interruption insurance policies help Massachusetts businesses manage covered prolonged durations of economic loss that follow certain disasters.

Business interruption insurance is a specialized type of commercial insurance. Rather than offering protection against liability lawsuits or protecting physical property, the insurance acts as a safeguard from certain sustained income losses. For businesses that experience these troubles, the coverage often proves invaluable.

What Businesses in Massachusetts Need Business Income Insurance?

There are many businesses in Massachusetts that may benefit from having a business income insurance policy. The following are merely a few examples of why specific businesses might want coverage:

Motels and hotels can take months to rebuild after a covered disaster
Restaurants might have fewer customers for a while after reopening
Manufacturing businesses might not have sellable products while rebuilding facilities
Resorts might see lower tourist numbers following a disaster

In short, almost any business that would struggle to afford its necessary bills following a disaster should consider purchasing business income insurance.

What Kinds of Incidents Does Business Income Insurance Provide?

Most business income insurance policies cover perils similar to what commercial property policies offer protection against. For instance, business income policies might protect against prolonged revenue losses that are caused by windstorms, hailstorms, fires, electrical surges and similar physical disasters. The exact incidents that any one policy protects against will depend on that policy’s terms, conditions and exclusions.

Do Business Income Policies Cover Changes in the Marketplace?

While they often offer many protections, business income policies usually exclude marketplace events from their lists of protections. Poor business decisions, increased competition, changing market forces and similar issues all generally recognized as part of the risks that businesses assume and should prepare for. Rather than these types of risks, business interruption policies tend to focus on shielding businesses from unexpected natural disasters that are much harder to anticipate.

Are Business Income Policies Available Through Package Policies?

Business income policies are widely available from many insurance companies. The policies often can be purchased as stand-alone policies, or as part of business owners or commercial package policies. The latter two options generally combine this coverage with other important coverages when business income coverage is included in them.

How Long Do Business Interruption Policies Supplement Revenue For?

Precisely how long a specific business interruption policy will make supplemental revenue payments for following a covered disaster depends on the policy’s terms and the specifics of the claim. Broadly speaking, there are three levels of policies available:

Standard Business Income Policies typically make payments until a business resumes operations
Extended Business Income Policies typically make payments for a specific duration after operations resume (e.g. 30, 60 or 90 days)
Contingent Business Interruption Policies typically make payments when a business’ essential supplier experiences a covered disaster

For help selecting the right type of policy and making sure it’ll provide payments for a sufficient amount of time, businesses should speak with an insurance agent who specializes in this type of insurance. A specialized agent will be familiar with the coverage options available, and they’ll have the knowledge needed to make wise recommendations.

How Can Massachusetts Businesses Get Business Interruption Insurance Coverage?

For help finding business interruption insurance coverage that will protect your business well, contact the independent insurance agents at Roger Butler Insurance. Our agents have helped many Massachusetts businesses with this insurance coverage, and we’re ready to assist you.