Since 1953, Mississippi has been impacted by 18 hurricanes and 12 tornadoes that were significant enough for parts of the state to be declared a federal disaster. When catastrophes like these affect businesses, these companies often need to remain closed for several weeks while repairs are made.
Forced closures can be especially hard on small businesses that don’t have a lot to fall back on. Fortunately, business interruption insurance can mitigate this risk. Talk to an independent insurance agent near you to get more information and for help finding a suitable policy.
What Is Business Interruption Insurance?
Business interruption insurance, which is sometimes referred to as “business income insurance,” is a commercial insurance policy that can provide your company with a continuation of income during the times it is forced to temporarily halt operations while repairs are made following a covered event.
This insurance may also cover closures that are the result of a civil authority, such as if the local government mandates that the road leading to your business remain closed for an extended time.
How Much Does Business Interruption Insurance Cost in Mississippi?
The cost of business interruption insurance can vary from one company to the next. Rates are calculated according to a few factors such as the following.
- The type of business you own and the industry in which you operate
- The weather risks in the ZIP code where your company is located
- Your company’s previous and expected annual revenues
- Your company’s average regular monthly expenses
Small businesses in Mississippi usually spend between $500 and $1,500 a year for their coverage. Large companies with higher annual revenues pay significantly more.
What Does Business Interruption Insurance Cover in Mississippi?
Businesses in Mississippi may be forced to close temporarily due to damage caused by covered events, such as the following.
- Accidental fires
- Tropical storms
If your business must temporarily shut down for repairs following a covered event, business interruption insurance can replace the expected revenues it would have generated if it been able to remain open. This enables your company to continue paying regular monthly expenses such as the following.
- Mortgage or rent payments for your business location
- Loan installments if your business is making payments on a commercial loan or line of credit
- Employee salaries and wages
- Tax payments
- Extra expenses incurred because of the closure, such as if you need to rent temporary storage or alternate workspaces while your business is being repaired
- Relocation costs if damage is so severe that you must permanently move your business operations to a new location
- Training costs if you need to instruct your employees on how to use newly purchased tools, equipment, or machinery before you can reopen
Talk to an independent insurance agent in Mississippi to learn more about what business interruption insurance can do for your company if it is impacted by a disaster.
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What Is Not Covered by Business Interruption Insurance in Mississippi?
As with any insurance policy, business interruption insurance has some exclusions on what it will cover. For instance, your policy will not cover the following.
- Property damage: This is covered instead by your commercial property insurance.
- Closures due to flood damage: Business interruption insurance only covers damaging events that are covered by your commercial property insurance, and floods are typically excluded.
- Unreported income: Income that is not documented in your company’s official financial records cannot be compensated.
- Utilities: This is because during a closure, your business will not be using utilities at the same level as it does during normal business operations.
- Communicable diseases: Unfortunately, as many business owners learned during the 2020 pandemic, closures due to diseases are not covered.
Learn more about what your business interruption insurance can and cannot cover by talking to an independent insurance agent with an office near you.
What Is the Indemnity Period for Business Interruption Insurance?
Your policy’s indemnity period refers to the length of time that benefits will be payable to your company following a covered event.
In most cases, the indemnity period starts on the date that the damage occurred and ends when your business is brought back to the same condition it was in prior to the disaster. Your policy will limit the indemnity period to a set time frame, typically between 30 days and one year.
Many business interruption insurance policies require a waiting period of two or three business days before coverage can begin. This means that for minor damage that can be repaired quickly, coverage may never kick in.
What Is Contingent Business Interruption Insurance?
Contingent business interruption insurance (CBI) covers against indirect losses caused by disasters that impact third parties that your business relies on for revenue.
For instance, let’s say you own a textile mill and one of the vendors you rely on for necessary production materials is impacted by a hurricane and needs to shut down for repairs. This can force your business to have to temporarily halt operations if you are unable to quickly find a suitable alternate vendor.
In this case, CBI could cover your revenue losses. A local independent agent can help you determine whether contingent business interruption insurance is a good fit for your Mississippi business.
How Can You Find the Best Business Interruption Insurance in Mississippi?
When you are looking for the best business interruption insurance, a local independent agent can help. These experienced insurance professionals are available to answer your insurance-related questions, explain your coverage options, and shop around to find you suitable coverage at a competitive price.
There are more than 200 independent agents in Mississippi. Contact an insurance agent near you to discover how easy it can be to find the best and most affordable coverage for your business.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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