What is LOSS OF BUSINESS INCOME INSURANCE?
Loss of Business Income (LBI) insurance covers you against the loss of revenue as a result of damage to your business premises, stock, fixtures and machinery, furniture and equipment.
The insured could be your sole proprietorship, partnership or incorporated business. Business Income Insurance;The policy protects you against the loss of income you may suffer if your property is damaged or destroyed by fire, flood, earthquake, vandalism or other covered causes of loss.
The policy could also protect your business from theft, fire and other perils that might damage or destroy your building, including the stock of goods and equipment inside the building. It also helps pay to rebuild your damaged business property or replace it if it is lost or destroyed.
In most states, the policy can cover losses in excess of two years from the date of loss. However, it may not extend to cover more than three consecutive calendar years, so it is important to evaluate your current policies to see if they provide the coverage you need.
Businesses that depend on the use of buildings or premises, for example, service businesses, are at a particular risk of suffering a loss of income if their buildings and property are damaged or destroyed.Business Income Insurance; Insurance can help compensate for such losses by paying the insured for the decrease in income that results from the destruction of the property.
A Loss of Business Income insurance policy helps the insured by providing coverage for the reduction of income caused by a covered peril.
The term “loss of business income” means the difference between what the insured’s business would have earned and the amount of income that is actually received as a result of the covered cause of loss.
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Your claim is for the reduction in income as a result of the covered peril and not necessarily the replacement value of the destroyed or damaged property.
Loss of business income insurance covers only that portion of the income lost by the insured business as a result of a covered peril.
The policy does not replace the property destroyed or damaged. Your business property is replaced with cash, and that cash is placed in an account to reimburse you for the decrease in income.
An LBI policy provides compensation for the reduction in income due to a covered cause of loss.
The LBI insurance policy is often used as an alternative to a commercial general liability policy. However, if your business uses tangible assets, such as office furniture and fixtures, the policy may also be used as an asset-protection policy to cover the replacement costs of the items that are destroyed or damaged by the covered peril.
There are several types of LBI insurance, including “property only”, “physical damage only”, “comprehensive” and “umbrella”.
Loss of business income insurance can cover the following:
Property, including the stock of goods and equipment, fixtures, machinery and other property and goods within the business premises
Loss of income due to damage to or destruction of the property
Loss of income due to theft, vandalism, malicious mischief or similar acts
The Most Important Insurance You Never Heard Of: Loss of Business Income Insurance
Have you ever thought about the possibility of an insurance plan that will cover you for the loss of business income due to any unforeseen circumstances? Nowadays many people are making plans for their future; they are making the plans for the next year and sometimes, even for their retirement. They are thinking about it while planning their finances.
But what if something unexpected happens? What if your business loses money? Business Income Insurance;Will you be able to take care of your children, pay your mortgage or provide for your family? If the answer is “No”, then it’s time to think about insurance.
Loss of business income insurance (LBI) is an important insurance plan that every business owner should have. Not just that; it is also one of the most important insurance policies that you can have. I am going to tell you why it is important and how to take advantage of this plan.
What is LBI?
LBI is an insurance plan that helps you to cover for the loss of business income. This insurance policy covers you against the loss of revenue due to a variety of reasons. You can choose to insure yourself against the loss of business income due to lawsuits, fire, theft, or natural disasters, etc.
Here is a list of some of the possible reasons for your business to lose money.
• Product recalls or defections.
• A legal suit.
• A natural disaster.
• A fire or a burglary.
• The closure of a major client.
Now, it’s time to talk about what types of loss your business may incur.
Reasons for the Loss of Business Income:
There are many reasons for the loss of business income. The most common reasons include:
• Legal suit
• A fire or burglary
• A natural disaster
• Closure of a major client