A Definitive Guide to Business Interruption Insurance for Manitobans

November 13, 2020

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Owning a business is not for the faint of heart! It brings flexibility, freedom, excitement, and pride. It also brings a lot of stress. Thankfully, by protecting your company from costly, unexpected circumstances, Business Interruption Insurance keeps stress to a minimum and keeps your business running smoothly — no matter what life throws your way.

How Business Interruption Insurance Works in Manitoba

Business Interruption Insurance is a type of additional business coverage that’s typically added to an existing policy.

If an unforeseen event or circumstance interrupts your business proceedings, it replaces the income you’d be forced to lose. In other words, it pays you the income you would’ve expected to generate in normal circumstances.

Business Interruption Insurance can be used to handle any necessary, ongoing expenses, like paying your employees, paying your bills, and settling inventory payments — giving you much needed peace of mind.

What’s considered an interruption?

Any unexpected event that results in direct physical loss or damage for your business is considered an interruption. The most common types of interruptions are:

  • Fire
  • Explosion
  • Water damage
  • Cybercrime

How much does Business Interruption Insurance cost?

Costs vary widely, because some insurance companies include it as a part of their package policies, while others charge it as a percentage based on your company’s expected gross profits over a certain period of time.

What does Business Interruption Insurance cover for Manitobans?

Business Interruption Insurance provides Manitoba business owners with coverage for things like wages, profits, and rent.

Specifically, it covers things like:

  • Employee wages
  • Profits
  • Taxes
  • Loan payments
  • Fixed costs (Operating expenses and costs incurred during the interruption)
  • Temporary location (The cost of moving to and operating from a temporary location)
  • Commission and training (The cost of training the operators of any replaced machinery)
  • Civil authority interference (Revenue lost due to government-mandated closures, like government-issued curfews)
  • Extra expenses (Reimbursement for reasonable expenses, beyond the fixed costs, that allow you to continue operation while repairs are made)

What doesn’t Business Interruption Insurance cover?

While Business Interruption Insurance is an excellent resource to help you during trying times, there are a few things it does not cover, like:

  • Interruptions caused by a utility’s failure to provide services (like Manitoba Hydro)
  • Undocumented income that doesn’t show in your financial records or that’s higher than your policy’s income cap (keep this in mind as your business grows)
  • Market or economic changes
  • Any events not covered by your property insurance (like floods and earthquakes)

Business Interruption Insurance and COVID-19

A pandemic is often included in the list of exclusions for this type of coverage. Unfortunately, because it doesn’t result in direct physical loss or damage, the COVID-19 pandemic is not considered a business interruption and it is unlikely that a claim would be paid.

What industries need Business Interruption Insurance the most?

Every business owner should already have (or seriously consider) Business Interruption Insurance because unexpected losses can interrupt or stall any business at any given time.

That said, we recommend Business Interruption Insurance especially for:

  • Contractors
  • Manufacturers
  • Restaurants

…and any business that relies on the use of a building and equipment for daily operations, and that would have to permanently close because of damage.

It’s never too late to protect your business.

If your business is operating without interruption insurance, contact us. We’ll connect you with your very own Business Interruption Advisor who will make sure you have the protection — and the peace of mind — that you need.