In the Gulf Coast region, businesses are well aware of the natural disasters that are common to our region, including flooding, wildfires, hurricanes, hail, and windstorms. Any one of these severe weather events can cause widespread damage to businesses and their commercial property, leading to the loss of both commercial property and revenue. When businesses are crippled by major weather damage, they may pin their hopes for recovery on securing a federal disaster loan through the Small Business Administration. Unfortunately, getting a federal recovery loan may cause more problems than it solves. In today's Aegis blog post, we'll look at why Business Interruption Insurance may be a far better solution than disaster loans for businesses looking to get financial help when Mother Nature strikes.

Easier Application Process

Business Interruption Insurance offers companies the benefit of ease, as it does not require the abundance of paperwork that is required for a federal economic recovery loan. Often businesses suffer costly delays just in trying to apply for a federal disaster recovery loan, since much of the required paperwork is usually lost or damaged in the disaster that caused the business closure. In addition, the wait time for federal economic recovery loans is lengthy, and the business may not be able to recover even if they are approved for the loan because of the bills and expenses that are still due while they wait. On the flip side, Business Interruption typically requires only a short time of closure before benefits can be paid.

Possible Loan Rejection

Despite the severity of the damage and losses caused by a major weather event, companies may still be denied a federal economic disaster loan, even when they have all necessary paperwork available. They might not qualify based on their size, location, industry, or type of losses, and there is rarely any other kind of financial assistance available from other government entities.  Companies that put their hope solely in securing a federal recovery loan may be forced to close permanently without financial resources. In addition, businesses that are approved for federal disaster loans may find that their company's losses, bills, and repair costs far exceed their approved federal loan amounts.

No Repayment Necessary

One of the biggest advantages to choosing Business Interruption Insurance over a federal disaster recovery loan is that there is no repayment necessary for the insurance coverage. Companies know their Business Interruption Insurance premium ahead of time and can budget accordingly, whereas a federal recovery loan may have high interest rates and a short repayment window, putting already hurting companies in a greater financial bind. Ultimately, the inability to repay federal disaster loans could devastate a business and force total closure anyway.

However, Business Interruption Insurance can be acquired before disaster strikes, especially when securing all other important Commercial Insurance, such as Commercial Property Insurance and General Liability. If you need more information, the friendly and knowledgeable team at Aegis can answer your questions about Business Interruption Insurance, and discuss what the policy does and does not cover.  Business Interruption Insurance may even be bundled together with your other Commercial Insurance policies for additional premium savings. Contact Aegis today at 713-850-7622 to find out more about Business Interruption Insurance and what all it covers, or fill out our online form to request a free quote!