What Is Business Interruption Insurance Coverage?

Tornados, hurricanes, fires, earthquakes. All devastating instances where, in the blink of an eye, your entire livelihood can disappear. The financial strain, debt, and ultimate ruin as just some of the possibilities for a business when disaster strikes.

Fortunately, there’s a solution to keep your business and livelihood safe against unplanned disasters.

Whether you’re just starting out or are already established, business interruption insurance is a form of insurance that covers a loss of income.

Read here all about business interruption insurance coverage.

What Really Is Business Interruption Insurance Coverage?

Business interruption insurance or, business income insurance, helps businesses get back their lost income in the event a disaster (like a fire, flood, or tornado) hits. If your business needed to ever shut because of disaster, this coverage kicks in to protect you from permanently closing your doors

The majority of the time, business interruption insurance is part of a comprehensive insurance package. This means that a typical business insurance package does and should have some form of business interruption included in the coverage. 

Why Do I Need It?

There are lots of benefits of business interruption insurance. The most important is the financial support needed to keep your business afloat while you wait for repairs and/or rebuilding to finish. 

Unforeseen disasters will cause big problems for a business that relies on its income to function. Generally, businesses don’t always put aside disaster funds or include possible problems in their financial predictions. Business interruption coverage gives owners peace of mind in case it’s needed.  

The Fine Print

It’s important to understand exactly when and for how long business interruption insurance kicks in for. This amount paid out will be based on past financial records, so be sure to keep those backed up and saved in another location as a safety tip. Also, be sure to read up and ask your provider exactly what it covers.

In most cases, business interruption insurance will even go as far as to cover payroll, taxes, operating expenses, and even the cost to move to another location. Check out how long the coverage lasts, as most policy standards are 30 days but can be extended to a year.

You will also want to look into at which point this coverage will kick in. Some policies only cover the period that the business is restoring, while other kick in the day or a few weeks after the disaster struck. It’s important to know when and at what time this will kick in for your reference point.

Keep in mind, with the advent of COVID-19, this type of insurance will not cover you in the event of a pandemic as it is listed as an exclusion to the coverage.

Do You Have Business Interruption Insurance Coverage?

Understanding these concepts is important whether you’re new to the business world or a seasoned business owner. it’s important to not only review the coverages you currently have but what else it on the market. Take your time to do your homework about your business interruption policies, and see what else is on the market that might work better for you.

Be sure to check out the rest of our site for more helpful content!

This post contains affiliate links. Affiliate disclosure: As an Amazon Associate, we may earn commissions from qualifying purchases from and other Amazon websites.

Written by Marcus Richards

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.