Whether because of a fire, an earthquake or another problem altogether, sometimes you find you need to unexpectedly close your company’s doors. Of course, a closed business makes no money, which is why you should have business interruption as part of your Orange insurance policy. Understanding these terms will help you understand your policy.
Actual Loss Sustained
Actual loss sustained means that your insurance company only needs to pay out if you truly need to close your doors during your typical business hours. The insurer is only obligated to pay for loss sustained and does not need to exceed the policy limit, even if your business lost more than the limit.
Period of Restoration
Insurers only need to cover losses during the period of restoration, which is typically considered to be the time it takes to replace, repair or rebuild damaged property. The period begins when the loss occurs and ends when the property is ready to re-open. Insurers do expect reasonable speed.
For the purpose of insurance policies, business income is defined as net income that a business would have earned. This includes the normal operating expenses and payroll.
Business interruption is especially important if you own a storefront, restaurant or another business dependent upon customers coming through the door regularly. Consider adding it to your Orange insurance policy if you haven’t already.