Business Interruption Insurance

Business Insurance for Business Interruption

Business interruption insurance, also called business income coverage, replaces lost income and covers continuing expenses when a covered property loss forces you to suspend or reduce operations. This coverage bridges the financial gap between when disaster strikes and when your business recovers.

Why Your Business Needs This

• Most businesses can't survive extended closures without income replacement
• Fixed expenses like rent and payroll continue even when operations stop
• Customers may shift to competitors during prolonged closures
• Recovery periods often take longer than anticipated

What It Covers

Business interruption insurance replaces net income you would have earned during the closure period, covers continuing operating expenses like rent and utilities, pays for payroll so you can retain key employees, and covers extra expenses to reduce the length of closure. Coverage begins after a waiting period, typically 48 to 72 hours, and continues until you resume normal operations or reach the policy period limit. The loss must result from a covered property damage to trigger business interruption coverage.

How Is the Coverage Amount Determined?

Coverage is based on your financial records showing historical income and expenses. You'll need to project anticipated income for the coverage period, adjusted for business trends. Underwriters review profit and loss statements to determine appropriate limits. It's important to update your coverage annually as your business grows.

What Isn't Covered?

Business interruption coverage requires direct physical damage to your property from a covered cause of loss. Losses from power outages, pandemics, economic downturns, or other events that don't involve physical damage to insured property aren't covered unless specifically added by endorsement.