Winter (sigh!). It’s a season we all know is coming, and for small business owners, it’s essential to be prepared for the challenges that Canadian winters bring. Frigid temperatures, ice, and snow storms can disrupt normal operations, making preparedness a necessity.
According to the Farmers’ Almanac, we should expect below-normal temperatures from east of the Rockies to Ontario. Winter temperatures are predicted to be the coldest from the Prairies to the Great Lakes region, and B.C. is forecast to be unseasonably chilly. The Maritimes are expected to experience above-normal temperatures, and the outlook for Newfoundland and Labrador is some snow, but it’ll be wet, mushy, and slushy.
Whichever province your business is in, nasty winter weather can force you to close unexpectedly for a few days (or worse). That’s why now’s the time to give business interruption insurance thought. It’s coverage that’s designed to get you through days or weeks of forced closure due to inclement weather and other events beyond your control. Let’s dig into how it works.
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What Is Business Interruption Insurance?
Business interruption insurance can cover losses resulting from an insurable event, such as a fire, water damage, theft, vandalism, or a natural disaster. That includes scenarios like a heavy snowfall causing blackouts and making driving impossible.
It’s intended to replace a business’s earnings or lost profits and overhead costs required to keep your business operating, including rent or mortgage payments, loan payments, utility bills, and employee payroll.
What Different Types of Business Insurance Are There?
You have a few options for the type of business interruption insurance you want to add to your policy. These include:
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Standard Business Interruption Coverage
A standard business interruption policy covers a business’s lost income and operating expenses due to physical damage to its property caused by perils such as fire, flood, severe weather or natural disasters, theft, and vandalism.
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Contingent Business Interruption Coverage
Covers losses caused by damage to the property of a third party, such as a critical supplier your business relies on for raw materials, products, and other supplies.
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Extended Business Interruption Coverage
This coverage extends beyond the time it takes to repair or restore the physical damage caused to your business property by an insured event by covering the time it takes to return to your pre-loss income levels. Once your business is operational again, extended business interruption insurance helps protect income while the business ramps back up to normal revenue levels.
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Civil Authority Business Interruption Coverage
No doubt you recall the COVID-19 pandemic and the provincial government lockdowns imposed for a time to curtail the spread of that disease. Although business interruption insurance does not cover pandemics, this particular version of business interruption insurance does apply if you’re forced to close or limit operations due to an order from a government, even if your business property itself is not damaged.
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Lead Property Business Interruption Coverage
Suppose your business property is located inside a shopping mall, plaza, or anchor department store, and it suffers damage that forces you to close or severely limits customer traffic. This type of business interruption coverage may compensate you for those losses.
Speak to a licensed Zensurance broker if you have questions about the type of business interruption insurance your policy should include.
What Does Business Interruption Insurance Not Cover?
All types of insurance contain exclusions, which are provisions that remove your coverage for certain risks, hazards, or events and outline what is not covered by your policy. They are designed to help keep the price of premiums affordable.
Business interruption insurance also features a few exclusions:
- Terrorism and war
- Undocumented income (income that is not listed in your financial records)
- Pandemics, viruses, or infectious diseases (e.g., COVID-19)
- Floods, earthquakes, or pollution damage unless your commercial property insurance policy includes them as named perils
Can I Buy Business Interruption Insurance As a Standalone Policy?
No. Business interruption insurance is not a standalone policy or coverage you can purchase unless you also have commercial property insurance.
It’s worth noting that many commercial property insurance policies automatically include standard business interruption coverage. If your policy doesn’t, you can ask your Zensurance broker to include it.
How to Get Low-Cost Business Interruption Insurance
No matter what you do, where in Canada you do it, your industry, or if you work online, offline, or both, Zensurance can help protect your finances and reputation with a customized, low-cost business insurance policy.
We are Canada’s leading small business insurance provider for a reason: We’re in the business of keeping Canadian small businesses in business.
Fill out our online application for a free quote in less than five minutes.
We’ll shop the market on your behalf and ensure you’re adequately protected this winter and all year round.
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Understanding Business Interruption Insurance Before Winter Hits
Winter weather can force you to close for a few days (or worse) unexpectedly. That’s why now’s the time to give business interruption insurance thought. Here are your options and how business interruption coverage can protect your income if forced to close temporarily.
