Most companies know the importance of insuring their property and assets against damage or liability. But in order to cover operating expenses and income losses in the event certain catastrophes lead to the temporary closure of a business, there’s another critical safeguard to consider: business interruption insurance.
Read these FAQs to learn more about business interruption coverage and how it can help your business recover after a covered loss. Keep in mind that individual policies can vary widely, so it’s always important to review your coverage options with your agent or broker.
Business interruption insurance, sometimes called business income insurance, can be part of a standard business policy form or purchased as an endorsement or rider to a property insurance policy or package. It covers operating expenses and lost income for a set period of time incurred by a company that closes or is unable to operate normally as a result of physical damage to the business property by a covered peril.
For example, if a fire renders a retail store unusable and it is not able to sell merchandise and generate revenue during the time it is closed for repairs, business interruption coverage could help offset income losses along with continued necessary day-to-day expenses (such as payroll and taxes).
