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Building It Back, But it Never Opens

Our agency specializes in insuring Businesses, Churches and Private Schools, and we get to talk to many business owners, pastors, administrators and committees about their insurance program and when we review the Property part of the policy, most of the questions and concerns from clients are related to the building values, deductibles and premiums.  

This makes since because most of our clients are in Texas and Texas has a high-risk potential for severe weather.  Therefore, the property policy is usually the most expensive coverage in their insurance program.  

Property values and deductibles are important, but it is quite possible that you could suffer a disaster such as a fire and tornado and you have the correct insurance on your building and contents but your doors of your business, church or school never opens again.  How does that happen?  Answer, the loss of income that results from that loss and the extra expenses that are incurred.

 

Maintaining the Income

It is not uncommon for a business, church, or school to see fluctuations in their receipts after a major loss occurs but over time these fluctuations can have a major impact on the revenue of the entity.  Also, there are extra expense that are incurred while trying to get a temporary “fix” in place.  Here are some challenges:

Business owners- being down for any amount of time could result in lost sales from existing and potential clients.  If that happens, keeping your existing staff and paying all the existing bills could be a real challenge and hardship.  Setting up a temporary location with temporary equipment can also be expensive.

Churches- At the beginning, congregations pull together to do all they can to keep things going.  People tend to give more and will be willing to make short term sacrifices. But what if things are not back to normal after 6 months?  Is there a chance people might start going to another church in town, is there a chance that they might never return?  If so, there could be tremendous financial consequences for the congregation.

Schools-  The cost to rent a temporary location or temporary buildings along with supplies to get classes up and running can be very expensive.  You may also have to rent locations for your athletic events.  What about the students?  Will parents keep their kids in the school or enroll them someplace else?  What happens if students leave, how does that affect us financially regarding tuition and future donations.

 

Solution- Business Income and Extra Expense Coverage

Business Income Insurance is a time element coverage which pays for loss of earnings or income when business operations are interrupted, curtailed or suspended due to property loss because of an insured cause of loss.  Also covered are loss of rents and rental value.  This coverage is vital because it keeps the business, church or school strong financially through a disaster.  You will determine the amount of coverage you will need.  There are many tools, such as Business Income Worksheets that are available to help you.  If you don't have a Business Income Worksheet, contact us and we will send one to you.

Extra Expense Insurance is the reimbursement for additional expenses incurred because of an insured loss.  Additional, is the key word, an example of the coverage could be the additional rent to move into a temporary location, the postage used to notify members of your temporary location and the moving costs to get into the temporary location.  

 

We Can Help

Business owners, pastors and school administrators are tasked with making sure that operation continue even amid disasters.   The Shropshire Agency will help your church develop a Disaster/Contingency Plan to help your church react and respond should a disaster occur.  We will also provide a strong property and casualty insurance program to insure your church properly and affordably so that you can spend your time taking care of the community.

We want to help your church!  Call us today at (806) 763-7311 or 

 

View some of our other blogs on Disaster Planning

 

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