Keith Izsak, Manager at Affinity Insurance (Prince Albert), discusses the importance of Business Interruption Insurance. Find out why it could be the missing piece in your commercial insurance.
Tell us a little bit about your commercial business at Affinity.
We're about a 45 - 55 split of commercial to personal lines so commercial is a big part of our business. We take a lot of time with our commercial clients – it's our forte. We look at our role as a partner with our commercial lines clients in developing a risk management plan. Policies are reviewed at least annually, with some larger and mid-size accounts quarterly. We make every effort to conduct the reviews face-to-face with our clients. We show them real life examples and I use stories from my adjuster background to explain why we think they should carry a particular coverage.
Why do you think business interruption insurance is important for your customers?
There's not just one reason. Each client has a need for business interruption and their needs will vary based on their financial positions, comfort level and the aggressiveness of their company. For example, if you have someone who is a new business – they've just opened their doors – there's a huge financial output and it's possible they have used all their finances to get started up. If they suffer a loss this early, before they're established… it can put them out of business.
Another example is for a business that could be growing quickly. Being concerned about
competition, a shutdown could effectively block their anticipated income and suppress their
Every company is unique in how they arrive at their income and the relationship they have with their customers. Talk to them and really dig deep – it'll help you identify how this coverage will help them to mitigate losses and be prepared for a “perfect storm.”
Do you have any stories about a client using the coverage?
A client suffered a major water escape loss shortly after buying an apartment complex. The water rupture occurred on the top floor of a 4-storey complex. It saturated the floor in two units on the fourth floor and continued into the walls and ceiling of the floors below and pooling in the basement. As a result, the tenants couldn't live in their rented suites and wouldn't be paying rent. We had discussed this potential for loss when looking at the quote and “loss of rental income” was included in the purchase of the policy.
Without this coverage, the building would have still needed repairs but the loss of rental income could have had been more of a financial burden than the owner could hold. Knowing that was covered allowed him the financial stability to continue to grow his business.