Business Interruption Insurance

 

Business interruption insurance is designed to compensate for lost income in the event that your company has to vacate the premises as a result of a covered loss under your property insurance policy. Business interruption insurance is also sometimes referred to as business income insurance.

About business interruption insurance:

Business interruption insurance covers the profits you would have earned, if the disaster had not occurred.

Business interruption insurance is of more importance to businesses that are primarily driven by a physical location. 

The amount business insurance compensates for is based on financial records, limited by the amount purchased or included in the policy.

Business Interruption insurance can include coverage for both continuing expenses and extra expenses (if purchased).

Continuing expenses: normal operating expenses that continue while property is being repaired or replaced after having been damaged by a covered cause of loss. Continuing expenses may include, but are not limited to: mortgage payments, utilities, insurance, salaries and wages, taxes, legal and accounting expenses, advertising, etc.

Extra expenses: expenses in excess of normal operating expenses that are incurred to continue operations while property is being repaired or replaced after having been damaged by a covered cause of loss. Extra expenses may include, but are not limited to: lease of new space, expediting expenses, cost of moving, furniture/equipment rentals, additional advertising, overtime, etc.

Business interruption insurance is usually optional; however, it is likely included on your standard Business Owners Policy (BOP). If it is not included on your BOP, it can be purchased separately and added to you property insurance policy, or included in a custom package policy.

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