What is Business Interruption Insurance?
When a disaster affects a business, the business’ losses can extend beyond immediate property damage and injuries that are sustained in the disaster. Operations may have to be slowed down or stopped altogether in the aftermath, and with this revenue frequently decreases. Business interruption insurance helps protect businesses from the financial costs of operational slowdowns and stops that are caused by covered disasters.
In offering protection for covered drops in revenue, business interruption insurance is a unique form of insurance. Few other types of policies will provide payments for revenue decreases even if the policies cover damage or injuries sustained during a disaster.
(Since business interruption policies offer payment for covered decreases in revenue, or income, this protection is sometimes referred to as “business income insurance.”)
What Sorts of Disasters Does Business Income Insurance Protect Against?
In general, business income insurance protects businesses from the same sorts of disasters as commercial property policies cover. Exact coverages can vary, but most business interruption policies offer coverage for perils like fire, windstorms, and theft.