Business Income insurance is a crucial aspect of protecting your business’s financial needs in the event of an unexpected disaster that disrupts your operations. It provides coverage for lost profit and necessary and continued expenses (payroll, rent, utilities, taxes, etc.) while businesses recover from disasters such as fires, floods, and tornadoes.
Why the limit matters
The limit refers to the maximum amount an insurance policy will pay out for a covered loss. It is essential to determine the appropriate limit for your business, as it directly impacts the level of protection you will have in times of crisis. Setting the right limit ensures that your company has sufficient coverage to meet your financial obligations and maintain its viability during times of loss.
How to determine the right limit
Marsh McLennan Agency (MMA) was recently asked to conduct a Business Income Analysis of a single location, $200 million manufacturer with a Business Income limit of $19 million. Upon completion of our review, it was determined that the insured was underinsured by $30 million dollars.
By understanding your unique business operations, potential risks, and financial goals, MMA’s team can provide several valuable insights to determine the right coverage for your company’s needs. It is important to consult with experts who can guide you through the process and ensure that your company is protected. Partnering with MMA offers numerous benefits, including industry insights, assessment tools, and technical resources. If you have any questions regarding business income insurance and establishing a formal Business Continuity Plan, please contact a Marsh McLennan Agency advisor.
