A recent incident on Lehigh Station Road, where a vehicle struck a utility pole and prompted police to block off the area, raises an important question for local business owners: What happens when access to your business is suddenly restricted? Can your insurance policy help recover lost income?
The answer is: it depends. Here’s what business owners need to understand about business income coverage and what situations may or may not be covered.
The Two Keys: Coverage and Trigger
To potentially recover lost business income under your insurance policy, two conditions must be met:
- Your policy must include Business Income (or Loss of Income) coverage.
This coverage is not automatic and must be specifically added to your commercial policy. - There must be a covered trigger—such as a “Civil Authority” action.
Civil Authority coverage applies when access to your premises is restricted by a government entity (e.g., police or fire department) due to damage occurring nearby. In the case of a road being blocked after an accident, this could potentially qualify.
Important Limitation: The 72-Hour Waiting Period
Even if coverage applies, most business income policies include a 72-hour waiting period (also known as a time deductible). This means the disruption must last longer than three full days before any benefits are paid. In many cases—such as utility repairs—the interruption may be resolved before this deductible period ends, resulting in no payout.
Power Outages and Utility Failures
Businesses that rely on electricity or other utilities to operate—such as manufacturers, restaurants, or service-based businesses—may face income loss even if their property isn’t directly damaged.
Off-Premises Utility Failure coverage may provide protection in these situations, but like business income coverage, it must be added to the policy and is also typically subject to a 72-hour time deductible.
Action Steps for Business Owners
To avoid financial surprises in the event of a disruption, business owners should:
- Review their current policy to confirm whether business income and utility failure coverage are included.
- Understand the conditions and exclusions of Civil Authority coverage.
- Consider policy enhancements or endorsements to better protect against short-term shutdowns.
- Discuss deductible options and waiting periods with their insurance advisor.
VanScoter Insurance Agency works closely with local business owners to ensure their coverage is aligned with real-world risks. With decades of experience serving the Greece and Rochester, NY communities, we’re here to help you evaluate your policy and prepare for the unexpected.
Looking for help reviewing your business insurance coverage? Contact us today to schedule a consultation.
