Running a company can be difficult without the right business insurance. One coverage most business owners need is business interruption insurance, also known as business income insurance and contingent business interruption coverage. It can help replace income you lose if you can’t open temporarily after a covered loss, like property damage.
- Commercial property insurance
- General liability insurance
- Data breach insurance
What Does Business Interruption Insurance Cover?
- Revenue you’d normally make if your business was open.
- Mortgage, rent and lease payments for the space your business operates from.
- Loan payments that you need to make during that time.
- Taxes, whether you pay them monthly or quarterly.
- Payroll for your employees.
- Relocation costs if you have to move to a new or temporary location because of physical damages.
- Extra expenses if, for example, you need to rent another space to temporarily run your business after a covered loss.
- Training costs for employees to learn how to use new machinery or equipment after a covered loss.
Business Interruption Coverage Restoration Period
How Much Business Interruption Insurance Coverage Do I Need?
- How long would it take your company to recover after a physical loss or damage?
- Does your business’ building have fire alarms and sprinklers that are up-to-date?
- If you suffered a covered loss, do you think you could find another location in your area to rent as a temporary spot to do business?
How Much Does Business Interruption Insurance Cost?
- Number of employees
- Amount of coverage
Business Interruption Insurance Exclusions
- Broken items resulting from a covered event or loss.
- Flood or earthquake damage, which you’ll need a separate policy for.
- Undocumented income that’s not listed on your business’ financial records.
- Utilities, because they’re usually turned off when your business closes due to damage.
- Communicable diseases that cause a shutdown in your operation.
Source: The Hartford, “What Is Business Interruption Insurance?” https://www.iii.org website. Accessed February 14, 2022. https://www.thehartford.com/business-insurance/business-interruption-insurance
© Copyright 2022. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented.