Business interruption insurance – What does it cover?

About business interruption insurance

Business interruption insurance is a critical coverage for businesses of all sizes. If there is a disaster or other event that prevents a business from using its premises, or from operating and producing income, this insurance covers lost income and helps the business continue to operate.

This is an especially important small business insurance coverage, as small businesses may have less insurance coverage in general or a harder time managing and reopening after a fire or disaster.

Business interruption insurance is only sold as part of a package insurance policy. Some small and medium sized businesses can get business interruption insurance as part of a Businessowners Policy that also includes property and liability insurance. It is also available as an addition to business property insurance policies.

Business interruption insurance coverage compensates businesses for lost income, profits that would have been earned if the disaster hadn’t occurred, and even expenses like utilities that may still need to be paid.

It is important to note that this insurance only pays for losses due to damage covered under the business property insurance policy. The insurance policy will not pay if the business is forced from the premises by, or is unable to operate because of, a flood, act of terrorism, or earthquake, if the business does not have supplemental insurance coverage for those events.