Business Interruption Insurance for Florida Companies

Business Insurance for Business Interruption

Business Interruption Insurance replaces lost income and covers continuing expenses when your business must temporarily close due to a covered loss like fire, storm damage, or other disasters. Your commercial property insurance pays to repair or replace damaged buildings and equipment, but it doesn't cover the income you lose while your doors are closed. Business Interruption Insurance bridges this gap, helping your business survive financially during the recovery period.

Why Your Business Needs This

• Florida businesses face significant risks from hurricanes, tropical storms, and other natural disasters that can force extended closures
• Your business still has expenses like rent, loan payments, and employee salaries even when operations stop
• Without income replacement, many businesses never reopen after a major loss
• Recovery from disasters often takes much longer than business owners anticipate
• This coverage helps maintain your competitive position by allowing you to retain key employees during shutdowns

What It Covers

Business Interruption Insurance covers lost net income based on your historical financial records and projections. It pays for continuing operating expenses including rent or mortgage payments, loan obligations, taxes, and employee payroll. The coverage helps you meet contractual obligations and maintain relationships with customers and suppliers. It can also cover costs to temporarily relocate your operations, expedite repairs to reopen faster, or advertise your reopening. Coverage begins after a waiting period following the covered loss and continues until you can reasonably resume operations or reach your policy limit.

How Is Coverage Calculated?

Your coverage limit is based on your business financial records including profit and loss statements, tax returns, and operating expenses. The Gordon Agency experienced agents review your complete financial picture to recommend appropriate coverage amounts. You'll select a waiting period, which is the time between when the loss occurs and when benefits begin. Most businesses choose waiting periods between 48 to 72 hours. The coverage period determines how long benefits continue, typically ranging from several months to a year or more depending on your business recovery needs.

What Triggers Business Interruption Coverage?

Coverage is triggered when a covered peril under your commercial property policy forces your business to suspend operations. Common triggers include fire, lightning, windstorm, hail, and other property damage events. The loss must cause direct physical damage to your property. In Florida, hurricane damage is a frequent trigger for business interruption claims. The coverage typically doesn't apply to closures from government orders, utility failures, or events that don't cause physical property damage unless you have specific endorsements.

Does This Cover Dependent Business Interruption?

Many policies include or offer extensions for contingent or dependent business interruption. This covers your income loss when a supplier, manufacturer, or key customer experiences a covered loss that impacts your operations. For example, if your primary supplier's facility is damaged by fire and they can't deliver critical materials, causing your production to halt, this extension would respond. This is particularly important for Florida businesses in industries with concentrated supply chains or significant customer dependencies.