Lost Operating Net Profits
These are the net income losses from anticipated sales for the period prior to the closing. Coverage pays out net profits earned by the store had the covered disaster not forced you to temporarily shut down.
Coverage
Business Interruption Insurance for Convenience Stores
Replaces lost revenue and covers ongoing operational expenses while your physical store recovers from a covered property loss.
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Business interruption insurance for convenience stores (also called business income insurance or business income and extra expense coverage) pays for lost operating income if a physical property loss causes you to temporarily close your store. Business interruption insurance reimburses you for the operating costs that continue even after the doors are closed, but you cover the expense of repairing the walls and display racks under the commercial property insurance. Generally, it is rolled up directly into a business owner's policy.
What's covered
What Business Interruption Covers
In assessing business income insurance for convenience store policies, it is important to consider coverage for lost net profit and the need to cover necessary fixed costs:
Know the gaps
What It Doesn't Cover
Understanding exclusions helps ensure you are not caught off guard by uncovered operational losses:
Do you need it
Who Needs Business Interruption Insurance
This insurance is a necessity for the rental, payroll, and debt payments of any retail store operator. So, does business interruption cover lost income when cash flow stops completely? The answer is yes.
One single fire or storm event can close a store for several weeks or months. If a business does not have active business income insurance, the rent, bank loans, and employee salaries may put a retail business into bankruptcy before repairs are completed. It acts as a financial bridge, keeping your business afloat until your doors can reopen for daily sales.
Pricing
What Business Interruption Insurance Costs
Your business interruption insurance cost is driven by annual gross revenue, payroll obligations, building construction type, and geographic catastrophe risks.
If a business owner has a property and liability policy, then business income and extra expense coverage are also almost always included and are not typically priced separately. Business interruption is a very inexpensive add-on, as the average monthly premiums are $150-$350 or $1800-$4200 per year for all of BOP. Check out our comprehensive guide to convenience store insurance costs.
What a claim looks like
Example Claim
Your backroom electrical panel is damaged by fire, and you are forced to close your store for three weeks for repairs. Commercial property insurance provides $30,000 to repair structural systems, but business income coverage steps in to cover $15,000 in lost net profits and $8,000 in ongoing rent and staff salaries, keeping your store solvent until you're up and running again.
How it fits
How It Fits With Your Other Coverage
Business interruption insurance is a direct dependent of the commercial property insurance policy. Business income coverage is available only after a covered property loss has occurred. If physical damage isn't covered by your property policy, your business interruption coverage will not trigger.
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Common questions
Frequently Asked Questions
How long does business interruption coverage last?
The coverage extends for the “period of restoration”, which is the period of time that is reasonable to work out to restore or rebuild damaged premises. The typical policy will specify a maximum period of 12 consecutive months from the date of the loss.
Does business interruption cover a slow season or reduced foot traffic?
No. Business income insurance is based on direct, physical damage to your business premises caused by a covered event, such as a fire or windstorm. It never triggers for slow sales seasons, economic dips, or local roadwork.
Get Covered
Ensure your store's payroll, rent, and profit are secure even if the property becomes damaged and your store is forced to shut its doors. Contact our commercial insurance professionals now and find out how to get your store fully protected with Insure C-Store.