It’s a normal day at your business.  You open your doors, and customers come in just like they do every day.  You look out the window and see dark storm clouds in the distance.  A few hours pass, and the storm hits, knocking your power out.  Since you can no longer operate your business while the power is out, is this something that is covered by your business insurance?

Central Insurance explains what business interruption coverages can cover.  “Business interruption coverage can be extended to include losses due to interruptions in utility services. Utility Services-Time Element provides coverage for a loss of income due to interruption of power, water supply, and communications. The business owner may select coverage for any or all of these utilities. Power and communications have an additional option to include coverage for overhead transmission lines – which is what was needed for those affected by the downed power lines. This form pays loss of profit plus continuing expenses, up to the selected limit or until service is restored.”

There are some important points that need to be kept in mind with regards to business interruption coverage.  Utility service business interruption cannot be purchased by itself, it is provided as an extension of business interruption coverage, thus needing to purchase the whole endorsement.  There is usually a waiting period for business interruption coverage, and that same period will apply to utility services.  Talk to your agent to understand what your waiting period is for business interruption.  Additionally, the loss of the utility must be due to a covered peril of loss.

Coverage is also available for damage to an insured property, such as appliances and computers, if there is a power surge and the surge damages the electrical item.

If your business relies on communications, power, or any other utilities, it is important to talk to your independent insurance agent about business interruption coverage.  There are many programs out there that offer this coverage, and making sure you have the right one that fits your business is important.