FAQ: What Does New Jersey Business Income Insurance Cover?

What does New Jersey business income insurance cover?

As a new business owner, I’m concerned about all aspects of my business and what’s covered under my insurance. I’m especially worried about being able to maintain my business and keep my employees if a disaster leads to slowed or suspended operations. What does business income insurance cover in New Jersey?

Business income coverage is an aspect of property insurance. If your business suffers a loss that causes operations to be slowed or suspended, this aspect of your business insurance policy will help cover the financial ramifications.

New Jersey business income insurance covers the following components:

• The business’s loss of income: While your business’s doors are closed, you’re likely not taking in any profits. Business income insurance provides reimbursement for these losses.
• Continuing operating expenses: While awaiting repairs for your business, you need to be able to keep your employees on payroll so they’ll be around for the reopening. Business income insurance covers employee wages during a period of suspended operation so you won’t be left on your own once the business is up and running again. Coverage also applies to any outstanding loans under your business.

Business income insurance basically pays your business’s bills while operations are temporarily slowed or shut down due to a covered peril and you’re not generating as much, or any, revenue.

What does New Jersey business income insurance not cover?

Well, since business income insurance is technically a part of your property insurance, any peril not covered under property insurance won’t be covered under business income either. So if business operations are suspended due to a non-covered peril, you’ll have to pay for those losses a different way.

The two main perils not covered under business income insurance are flood damage and earthquake damage. You’d need special flood insurance and earth movement policies in order to protect your business from damages and losses due to suspended operations caused by these types of disasters.

What are the benefits of New Jersey business income insurance?

Business income insurance is one of the most important coverages you can buy regardless of where you’re based. While business operations are slowed or suspended, business owners and partners stand to potentially lose a ton of revenue, not to mention their staff. Having adequate business income coverage can mean the difference between your business going under or staying afloat following a tragedy that causes a hiccup in operations.

New Jersey business income insurance typically provides coverage for the following perils:

• Fire and smoke
• Lightning
• Explosions
• Windstorms and hail
• Aircraft or vehicle damage
• Riot or civil commotion
• Vandalism
• Sprinkler leaks
• Building collapse
• Volcanic action
• Certain types of water damage

If your business’s operations are slowed or suspended due to one of the above perils, business income insurance will help cover your losses up to the policy’s limit. Your New Jersey independent insurance agent can help you review your business insurance policy to answer any remaining questions about your coverage. They’ll also be able to help you figure out whether you’ve got enough coverage or if you should purchase more.