Greg discusses components of business interruption insurance in this episode of Ask The Expert. 800 CHAB radio presents Ask the Expert with Greg Marcyniuk of Heritage Insurance located in Moose Jaw.
Here's a full transcript of the episode.
Rob Carnie: If you're in business, either as a manager or a business owner, you should know there is business interruption insurance.
Maybe not everybody knows about it but it's important to have to keep the continuity going in your business. Greg Marcyniuk from Heritage Insurance in downtown Moose Jaw joining us to talk about that. Business interruption, I suppose it could happen with a variety of things. And we've seen examples of it here, Greg, over the course of the past couple of years. And Greg, I suppose there are a number of ways business could be interrupted?
Greg Marcyniuk: Well, that's correct, Rob. With business interruption. It covers you under any peril insured. So, an example would be if there was a sewer backup, if you do have those coverages in place. As well as if there is fire, if there is vandalism. There are, you know, numerous things that can and will shut down business.
And I really believe one of the most important things is revenue and cash flow for a business. And just one business interruption could actually potentially close your doors. So, as far as the benefits of business interruption — first of all, revenue and business interruption provides coverage for income for your business, you know, what you would have earned during the closure period of the time that it would normally have been operating.
Rent lease payments — most rent and lease payments still need to be paid. And if there's no cash coming in, you can't make them and you could lose your lease on that or rent. The other thing is relocation. If it's bad enough, you have to relocate. Your business interruption will pay for you to relocate, set up elsewhere, so that you can get up and running and have that revenue coming back in.
The other big thing that I think a lot of people overlook, Rob, is employee wages. Like you've got some key employees and if you're shut down and you can't afford to pay them, they're not going to sit around, they have bills to pay. So very important that you are able to continue to make that payroll so you don't lose those key employees.
The other thing is if you own your business, or if you have equipment that you've gone out and you've taken a mortgage on, you still have to make those payments. And again, with the business interruption, it allows you to make those payments to the bank so that you can keep your building or any of the equipment that you may have mortgaged against. So, very crucial.
And I know right now, things may be a little slower. And people are looking at cutting back, you know. I highly recommend that this is one area that number one, that you have and number two, that you don't cut back on.
Rob: I suppose that the cost of business interruption insurance would vary depending on the size of your business?
Greg: Depends on the size of the business and the amount that your actual revenues are that are coming in. But as far as dollar per thousand, it's very reasonably priced. And again, I've seen it work so many times where people have had — I know we had one instance where a business had a water pipe burst and it took them almost a month and a half.
And again, those employees were taken care of and they were taken care of to make their mortgage payments. Things ran smoothly, and they were able to open their doors up again and just continue as if nothing has happened. So, a very important form for insurance.
Rob: If you don't have business interruption insurance and you're in business, you should really look into it. And it's as easy as a phone caller stopping here.
Greg: That's correct. Just come on down talk to any of our fine brokers here at the corner of First and Fairford West. Or, just give us a call.
Rob: Greg Marcyniuk, Heritage Insurance on 800 CHAB's "Ask The Expert."
(Video transcription by Speechpad)