Don’t forget to put this on your business formation checklist

| Apr 25, 2020 | Uncategorized |

Starting a new business comes with a great deal of excitement, but it also needs some serious attention to detail. Some of the decisions made from the outset have a lasting effect on the company, and it would be a good idea to get it right, or as close thereto as possible, from the beginning.

One area that some people may not think about right away is insurance. It does make it to most lists rather quickly, but one type of insurance you may forget about or not even consider is business interruption insurance. Like marriage, no one goes into a new business venture thinking it will fail or suffer from some sort of issue that closes it down for a time. With everything going on here in North Carolina and across the country, that may be at the forefront of your mind.

What business interruption insurance can do for you?

Fires, hail, wind, vandalism and other damage to your business can force you to close temporarily while repairs get underway. In some cases, you may need to find a new location for your business, depending on the extent of the damage — at least on a temporary basis until your primary location is once again up and running. Of course, you will file a claim under your commercial property insurance, but it probably won’t cover the following:

  • Mortgage loan or rent payments
  • Utilities
  • Payroll
  • Taxes
  • Relocation costs
  • Advertising
  • Lost profits

This is where business interruption insurance comes into play. It works in tandem to make sure that you do not experience significant financial losses during this time. However, a standard policy for this type of insurance does not ordinarily cover broken glass, earthquakes or floods. It may be possible to obtain a rider for these circumstances at an additional cost. You would need to discuss this with an insurance agent.

You would most likely need to discuss your business interruption insurance with an attorney if the company delays or denies your claim. If you end up in a dispute with your insurance company, you would most likely benefit from working with an experienced attorney instead of attempting to handle the matter alone. Insurance companies employ legal teams to make their cases, and you have the right to do the same.