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Business Interruption Insurance: The Basics

Business Interruption Insurance: The Basics

A windstorm causes major damage to your office roof. A fire destroys a portion of your warehouse. A flood reduces key pieces of your equipment to rubble. These and other disasters can strike your company at any time, preventing you from carrying on with business as usual. You now have a cash flow problem: you cannot sell goods or services until you’ve made necessary repairs and replacements, yet you still have to meet payroll and cover rent, taxes and other expenses. This is when you need business interruption insurance.

What is Business Interruption Insurance?

While your general business property insurance policy will cover the direct loss of property in the event of an accident or other disaster, it may not cover the income loss your business will experience while you’re making repairs and replacements. Business interruption insurance, on the other hand, will reimburse you for profits lost during a forced closing of your facilities.

Why do I need Business Interruption Insurance?

Losses without this valuable insurance product can be quite substantial. According to one small business insurance provider, the average claim is $1.36 million. That’s enough to put many companies out of business! The Federal Emergency Management Agency (FEMA) agrees. Its data shows 40 percent of small business owners never reopen after a disaster.

However, companies with business interruption insurance coverage can survive on the supplemental income they receive until their operations are back to normal. They can use this income to cover everyday expenses and operational costs rather than draining their bank accounts and—potentially—still coming up short.

Additional business interruption insurance coverage is available for companies who want protection from the costs associated with reopening their business after the disaster (such as overtime and extra equipment) and those who worry about interruptions caused by their suppliers. Insurers generally label this add-on product as contingent business interruption coverage.

Where do I get Business Interruption Insurance?

If you purchase an insurance package that bundles business property insurance and general liability insurance together, your insurer may include business interruption insurance coverage. Confirm with your insurance agent that this is the case for your company. If not, or if you need more coverage than what your business insurance package currently provides, consider prioritizing this investment. It could be the only thing standing between your company and bankruptcy should a disaster cause an extended emergency shutdown.

Remember, whatever your business insurance needs, we’re here to help! Please don’t hesitate to call or email us your questions and concerns.

Policies Every Employee Handbook Should Cover

Policies Every Employee Handbook Should CoverYou wouldn’t expect a builder to create a structure without a blueprint. Nor would you expect your employees to succeed in their jobs without a clear picture of what you expect from them. Taking the time to ensure you’ve established a mutual understanding of expectations is actually essential if you want to employ workers who follow the rules of your establishment, get along with each other, and perform their jobs admirably.

Your employee handbook can support you in this endeavor—if you draft one that covers all the bases. Consider the following 10 policies every employee handbook should cover. Some will help your team perform at their best, while others will protect you should one of your workers ever file a claim against you.

The “At-Will” Employment Policy. This policy explains that you—or your worker—can terminate his or her employment with your company at any time and for any (lawful) reason.

The Nondiscrimination and Harassment Policy. It’s important that your employee handbook takes a zero tolerance stance on discrimination and harassment. It should state that management will always take such complaints seriously and will never retaliate against the reporting parting. Don’t forget to describe options for reporting violations and consequences should an employee violate the policy.

Immigration Law Policy. Include wording in your handbook regarding your company’s commitment to only hire individuals who can legally work in the U.S. Outline the employment eligibility verification rules your organization follows.

Employment Classification Policy. Whether workers are defined as full- or part-time, exempt or nonexempt, determines their eligibility for overtime pay and some company benefits (such as employer-sponsored health insurance). Define these categories of workers within your employee handbook.

Time Off and Employee Leave Policy. Describe the rules for accruing and using vacation time and sick time. List any holidays for which your employees will receive pay. Clearly outline the steps your workers need to take to request time off as well as note whether unused time will carry over from year to year.

Meal and Break Policy. If an employee works more than a certain number of hours, employment laws dictate they must receive breaks and meal periods. Make sure your employee handbook covers these details as well as any related restrictions.

Timekeeping and Payday Policy. Your employee handbook should describe the rules and methods for recording time worked. It should also cover paydays, ways in which employees can receive their pay (check, direct deposit, etc.), and how final pay will be handled should you need to terminate an employee.

Safety Policy. Whether you’re running a small office or a large warehouse, your employee handbook should cover important safety and emergency procedures as well as the rules your workers must follow regarding reporting on-the-job injuries and accidents.

Attendance Policy. It will be difficult to reprimand an employee for tardiness, early departure or missed days of work if your employee handbook doesn’t cover your policies on attendance and punctuality. It may also be helpful to clearly define “excessive absenteeism” and the steps a worker must take to report a possible late arrival or unscheduled day away.

Employee Conduct Policy. Outline the standard of conduct you expect from your workers when it comes to drug and alcohol use/abuse, workplace violence, confidentiality, conflicts of interest and other common issues.

A comprehensive employee handbook will cover these essential topics (and more). If you’d like assistance drafting one—or want a third-party review of the employee handbook you’ve already created—we’re  here to help.