Check out what fixed expenses are in business insurance

Having business insurance is the best way to bring more security to your business. The basic coverage of this service already includes excellent protection in cases of fire, short circuits and explosions.

However, it is still possible to expand this service and bring even more protection and comfort to the corporate environment. Covering fixed expenses in business insurance is an excellent option to ensure the organization’s functioning.

In this text, we will explain in more depth what fixed expense coverage is and how it works. Check out!

What are fixed expenses in business insurance?

First of all, we will explain what fixed expenses in business insurance are so you understand their real importance.

We know that every organization needs the maximum possible protection for its assets to prevent possible accidents from compromising its operations and causing financial losses to the business.

Therefore, taking out business insurance is the best solution to prevent this type of scenario from being so damaging and bringing more peace of mind to the routine of companies. Therefore, coverage of fixed expenses appears as an additional addition to complement the efficiency of this service, offering even more benefits to policyholders.

It works as an extra service that includes a series of fixed values ​​if certain incidents make it impossible for the company to meet its financial obligations. Therefore, covering fixed expenses in business insurance certainly creates a more favorable environment for growth, favoring the company’s expansion towards success.

What are fixed expenses?

The main characteristic of fixed expenses is precisely their periodicity. They don’t have that name in vain. Therefore, these values ​​are not directly linked to the company’s production or are impacted by the organization’s performance. Although they may suffer some type of variation in certain periods, it is certain that they will always appear on the agreed date.

When we talk about fixed expenses, it is very common to only think about the basics necessary for the company to function, such as employee salaries and rent for the organization’s facilities. However, there are several other costs that are included in this category.

Therefore, this coverage is capable of covering the reimbursement of other expenses, such as: electricity, water and gas bills, telephone, condominium fees, payroll, internet, insurance, among others. We need to reinforce that these expenses occur regardless of the company’s performance.

Therefore, having coverage provides an extra guarantee so that the company can honor its commitments in the event of an accident making it impossible for the organization to pay these expenses on time. Check out a complete list of fixed expenses covered:

  • employee salaries: social and labor charges;
  • bills: water, gas, condominium, telephone, internet, electricity;
  • taxes relating to location and property;
  • leasing of machinery and equipment;
  • board fees.

How does fixed expense coverage work?

Now that you understand more about the coverage of fixed expenses in business insurance, let’s explain how this service works. Firstly, it is necessary to identify the situations in which the claim can be filed and receive reimbursement for the contracted policy.

There are different scenarios that allow this service to be activated, ranging from fires to tornadoes. Check out the full list:

  • fire;
  • lightning strikes;
  • explosions;
  • electrical damage;
  • gales;
  • tornadoes;
  • cyclones;
  • hail;
  • riots.

When filing a claim, the company enters the indemnity period — a time necessary for business activities to return to normal. This time coincides with the date of the occurrence and ends shortly after the organization resumes its usual rhythm — and may also occur if the maximum period defined in the insurance is reached.

During this period, the insured will be able to receive compensation for their fixed expenses and guarantee the operation of the company during crises covered by business insurance.

Why take out fixed expense coverage in business insurance?

As we have shown throughout this text, this service brings a huge layer of asset protection to companies, making it possible to overcome a crisis without compromising the company’s finances. Precaution is the best solution to overcome unpredictable obstacles on the journey towards organizational success.

Therefore, coverage of fixed expenses is considered a complementary service to the benefits already present in business insurance . It was developed as a solution that goes beyond the most common policies on the market to bring more protection and security to the integrity of organizations.

Try to identify the risks that the company is exposed to and evaluate the benefits that this service can bring. The contracting of optional coverage must be studied carefully to ensure the protection of the organization’s assets and ensure intelligent contracting for the enterprise.

Combining the best of business insurance combined with an extra layer of protection, fixed expense coverage is an excellent way to protect yourself. Thus, if an accident is triggered, it will be possible to protect yourself against possible financial losses that could destabilize the company’s operations and compromise its cash flow.

What does fixed expense coverage not cover?

Now that we have presented what this service is and how it can benefit your business, we have separated an exclusive part to eliminate your doubts about the advantages of this coverage once and for all. There are some losses that are not compensable and it is essential to know them to avoid unpleasant surprises in the future.

Among them, we can mention the company’s net and gross profits during the period in which the claim was triggered. In addition to them, we also have business turnover — or the total amounts related to the sale of products and services that have not yet been paid to your organization.

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