What Is Extended Business Income? And What Every Business Owner Should Know…

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A business interruption is usually the outcome of a serious claim. That interruption, better known as business income insurance, is one of the most important coverages in your policy. It covers the loss of income that your business will incur due to a necessary suspension of day-to-day operations as a result of a serious claim. This coverage is usually standard in most business or commercial policies. It’s important to remember that coverages can vary between carriers. Therefore, the actual limit and/or period of time provided by this coverage will usually be different between carriers, and more or less important to you than other business owners.

Extended Business Income is considered an optional coverage in most business and commercial policies. It is even more important than the initial interruption of business. Your customers and business income will not return to normal the day you reopen your doors weeks or months after a serious claim has been handled. This is where your extended business income kicks in, which provides coverage for customers and sales to return to normal once the business suspension is over. The limit and length of time for extended business income varies between carriers. Some carriers provide this coverage for an additional 30 days, while others may cover it for 90 days. It really depends on the carrier.

Please comment or email me with any questions, or for a detailed analysis of Extended Business Income and how it can make a world of difference for your business.

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3 Responses to “What Is Extended Business Income? And What Every Business Owner Should Know…”

  1. This was really good, you need to post this in numerous groups on FB targeting businesses & entrepreneurs!!!

    KD Wilson Sent from my iPhone

    >

  2. Jeff Bruno Says:

    Is this different than business interruption insurance?

    Jeffrey Bruno JJLN Consulting 215-480-2075 Jeff@jjlnconsulting.com

    • Jeff, business interruption insurance and extended business income are very similar, but not the same. Once your business has resumed, extended business income provides coverage for income that is still being lost. For example… A coffee shop reopens after 2 months. Their normal weekly revenue is $10,000. However, it takes the coffee shop 30 days for their income to return to their $10,000/week sales. Extended business income provides coverage for those lost sales during that 30 day period. Some carriers provide extended business income for 30 days, while other carriers may offer it up to 90 days. Remember, it’s considered an optional coverage and every carrier is different. Please let me know if this answer helps.

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