If you suffered a catastrophic loss today, your business
interruption insurance will reimburse you for what you the revenues would have earned without the event, minus what you did earn, up to the amount of the policy. However, if you set this
amount too high, you could wind up "over-insured" – and paying a higher premium
than you need to.
To make sure that you're in the "Goldilocks
Zone" (with neither too much nor too little coverage) when it comes time to
renew your business interruption insurance, estimate the revenue stream you'll
need to protect during the policy period by ask such question as:
- Has the
market for your products or services changed significantly since you last
bought coverage?
- What do
you see as the impact of expected economic or market conditions on your projected
revenues – for example, by raising or lowering prices to meet competition.
- If you have any new products or services for
which there is little or no sales history, check how similar products or services from your
competitors are performing. Be sure to
include any unique advantages that you, or they, might have (for example,
technological innovation).
- Do you have any contracts or advance orders to
support a revenue forecast that differs significantly from industry trends?
- Have you
made recent changes to operations or facilities – such as a new plant,
restructured management or marketing campaign – and you expect to increase
sales?
The risk management
professionals at our agency stand ready to help you answer these questions so
that you can protect your projected revenue stream with a comprehensive business
interruption policy tailored to your needs. Just give us a call at any time.