Every embroidery business owner should be aware of the importance of protecting his or her income against business interruptions. If you sustain direct physical loss from a fire or other covered cause of loss, chances are good you will also suffer an indirect loss of income. Indirect losses refer to lost profits and fixed expenses that continue whether your business is operating or not. You are likely to incur extra expenses as you attempt to resume your normal business operations. Loss of income refers to the suspension of business operations by direct loss or damage as a result of an insured cause of loss.
Extra expense refers to extraordinary expenses incurred during the period of restoration.
The period of restoration begins when direct physical loss or damage results from any covered cause of loss. Business interruption insurance is usually included in most standard business owners' policies, so its value sometimes goes unappreciated. If business interruption losses far exceed direct damage losses, the importance of this coverage cannot be overstated. Many embroiderers are pleased to know that loss of income coverage compensates for lost profits based on the businesses' projected monthly earnings, thus taking into account the sometimes seasonal nature of the embroidery market. Loss of income and extra expense coverages are limited to the actual length of time required to rebuild, repair or replace damaged buildings or business personal property.