What else should I be thinking about?
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Almost all businesses carry insurance and for many, business interruption insurance exists within their policy. The detailed information below will outline the basic premise of business interruption insurance and what could generally be considered a
claim. You should check with your insurance provider to understand your coverage and what, if any claims you may have.
WHAT BUSINESS INTERRUPTION INSURANCE COVERS
- Profits. Based on prior months’ performance, a policy will provide reimbursement for profits that would have been earned had the event not occurred.
- Fixed costs. These can include operating expenses and other incurred costs of doing business.
- Temporary location. Some policies cover the costs involved with moving to and operating from a temporary business location.
- Commission and training cost. In the wake of a business interruption event, a company will often need to replace machinery and retrain personnel on how to use the new machinery. Business interruption insurance may cover these costs.
- Extra expenses. Business interruption insurance will provide reimbursement for reasonable expenses (beyond the fixed costs) that allow the business to continue operating while the business gets back on solid footing.
- Civil authority ingress/egress. A business interruption event may result in government-mandated closure of business premises that directly cause financial loss. Examples include forced closures because of government-issued curfews or street closures related to a covered event.
- Employee wages. Coverage of wages is essential if a business does not want to lose employees while shutting down. This coverage can help a business owner make payroll when they cannot operate.
- Taxes. Businesses are still required to pay taxes, even when disaster hits. Tax coverage will ensure a business can pay taxes on time and avoid penalties.
- Loan payments. Loan payments are often due monthly. Business Interruption coverage can help a business make those payments even when they are not generating income.
The U.S. Occupational Safety and Health Administration (OSHA) has information to help employers address the coronavirus pandemic, including:
- Guidance on Preparing Workplaces for COVID-19: a booklet about COVID-19 and the workplace, with steps employers can take in different types of workplaces.
- Preventing Worker Exposure to (COVID-19)
- Additional Resources suggested by OSHA
To see all of the COVID-19 information available from OSHA , click here.
- Here is a webinar from the Michigan SBDC: https://www.gotostage.com/channel/cb8b99cfe4bd42d88c00cf3ef5aa60ad/recording/5a346e5a65db4e119e079ce551464dc3/watch?source=CHANNEL.
- Here is a Financial Projections Template from SCORE: https://core.score.org/resources/financial-projections-template
- Have you looked at your inventory management? Should it be changed based on the current situation?
- Have you looked at your overhead? What can be cut or reduced in the short-term?
- What will be the impact on your supply chain?
- It is important that your customers have a clear understand of your capabilities during this time. Make sure they know you are still open!
- It is also important that your employees know exactly what is going on and how the situation impacts them.
- Here is a great video discussing what you should be watching out for: https://www.youtube.com/watch?v=FK9Nk7WqFLU&feature=youtu.be
- Make sure to review other cybersecurity resources that cover a range of topics: https://wsbdc.org/protect-your-business/cybersecurity/
- Talk to your leader about potential deferral of principal payments on and outstanding loans.
- Talk to your insurance agent about business interruption insurance and if this public health crisis is a qualifying event.
- Talk to your landlord about a referral of rent payments.
- Prioritize your debt.
- Immediately eliminate unnecessary expenses.
- Prepare your financial documents that will be needed by the SBA to apply for a loan.