A fire, flood, or another type of loss that affects your business can be catastrophic. Severe damage can lead to months, if not years, of disruption for your business, and it can threaten your entire livelihood. Fortunately, business insurance can help you get your business back online and mitigate your financial losses.
When you make a business insurance claim, it is beneficial to understand the details of that claim, the different types of coverage, and the compensation you are eligible to receive.
There are three main areas of coverage that you should understand to create a realistic plan for your business recovery.
Business Contents Insurance, Inventory, and Equipment
As you file your insurance claim, it will be important to know the difference between business contents, inventory, and equipment. You may need to document these separately for the insurer, and confusing the three could lead to an issue with your claim.
Inventory is considered to be both goods available for sale and raw materials used to produce them. Retailers, manufacturers, warehouses, transportation businesses, and others can lose a lot in inventory in a fire or flood.
Equipment includes fixed assets that the business uses in the course of its operations, such as machinery, tools, fixtures, or containers. Equipment is used to produce, sell, store, ship, and provide goods and services.
Finally, there are contents. Contents insurance for a business covers just about everything else on the premises, including:
- Laptops and desktop computers
- Smartphones
- Point of Sale terminals
- Office furniture
- Printers, photocopiers, and all electronic equipment
If you are operating a restaurant, it would also include your dining room tables and chairs, etc.
Structure: Do You Own the Premises?
Businesses that own the building they operate out of may have a much more straightforward time dealing with structure insurance. They can work directly with the insurance company and may have a clearer timeline for when they can reopen.
Navigate the intricate details of business insurance claims with a comprehensive understanding, ensuring your peace of mind as a small business owner in Toronto. Discover the essential aspects of managing small business insurance Toronto claims smoothly.
When you do not own the premises, it can be much harder to know when you may be able to reopen, as rebuilding will be up to the landlord. Often, you will have to get in touch with the landlord for updates on repair work and when you can expect to reopen.
Business Interruption Insurance
When your operations are disrupted because of a fire, your business can be at risk. You still need to keep up with loan repayments, taxes, bills from suppliers, and even payroll. Without being able to operate, it can be tough to make all of those payments.
When you have business interruption insurance, your insurance provider can help you bridge the gap and stay in business until you can reopen.
Business interruption insurance, also known as business income insurance, will help replace that lost income so that you can make up for lost revenue and be ready to open when the time comes.
Because a disruption to your business can cause customers to go elsewhere, some policies also provide partial support after you are able to reopen, but this is usually an extra extension you need to include in your policy.
When you make a business insurance claim, make sure that your insurance provider honours the contract and pays a fair amount to keep your business going based on your entitlement under the policy.
