What is Business Interruption Insurance?

Business interruption insurance, also called business income coverage, replaces the income you lose when a covered event forces you to suspend operations. While property insurance pays to repair physical damage, business interruption covers the financial losses you suffer while your business is recovering.

A fire might close your doors for months. Business interruption coverage keeps your finances intact while you rebuild.

What Does Business Interruption Cover?

Business interruption coverage pays for lost net income you would have earned, continuing operating expenses (like rent and loan payments), extra expenses to minimize the shutdown period, and sometimes payroll to retain key employees. Coverage continues until you can resume normal operations or reach your coverage limit.

Calculating Your Exposure

How long could your business survive without revenue? Business interruption limits should reflect your projected income and continuing expenses for your maximum potential shutdown period. Underestimating can leave you short during recovery. Your insurance advisor can help you calculate appropriate limits.