What Does Business Interruption Insurance Cover?

A business-interruption claim may pay lost income and continuing expenses when a covered event forces a shutdown; for example, a covered fire may close a shop during repairs.

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Not necessarily—property-based business-interruption coverage may require physical damage, so a cyberattack may need a cyber policy or a specific endorsement to cover lost income.

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Only if the policy covers the equipment breakdown and includes related business-income protection.

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Sometimes—business-interruption policies may include or add extra-expense coverage for necessary costs that keep you operating or reduce a covered loss, such as temporary-site rent.

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Only if flood is covered by the property or flood policy that triggers business-income protection.

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Sometimes, if a covered hurricane peril damages insured property and triggers the income coverage.

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Sometimes—a covered business-income loss may include continuing loan payments, but the policy’s income definition determines which amounts qualify; it does not pay your full loan balance automatically.

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It may cover lost business income after a covered shutdown, but the policy usually calculates net income and continuing expenses rather than gross sales alone.

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Usually not under standard business-income forms: many require physical damage and exclude virus or pandemic losses, according to California’s insurance department.

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Often—business-interruption coverage may pay eligible payroll during a covered shutdown, but your policy can limit which employees count and how long wages are covered.

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Sometimes—a power outage may trigger coverage if a covered event causes it or a utility-services endorsement applies; an outage alone may not meet the physical-damage requirement.

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Sometimes—business-interruption coverage may pay rent you must keep paying after a covered shutdown; extra-expense coverage may address rent at a temporary location.

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Only if you have contingent business-interruption coverage and the supplier loss meets its terms.

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Sometimes—a business-income policy may include taxes that continue during a covered shutdown, but its definitions and loss calculation determine which tax bills qualify.

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Sometimes—business-interruption or extra-expense coverage may pay qualifying costs to operate at a temporary site after covered damage, such as rent or equipment rental.

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Sometimes—continuing utility bills may be part of a covered income loss; an outage that causes the shutdown may require a service-interruption endorsement with physical-damage terms and distance limits.

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Business-interruption coverage usually requires a qualifying covered event, often physical damage to insured property.

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Business-interruption insurance, also called business-income coverage, can replace eligible income and continuing expenses after a covered loss interrupts operations.

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Business-interruption and business-income coverage usually refer to the same protection for eligible income loss after a covered interruption.

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Business-interruption coverage responds to qualifying damage at your own premises; contingent business-interruption coverage may extend it to a scheduled supplier or customer whose damage disrupts your business.

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Business-income coverage pays eligible income loss; extra-expense coverage pays eligible added costs to keep operating or reduce the interruption.

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Insurers generally calculate business-interruption losses from expected versus actual income during restoration, then account for continuing expenses and costs avoided.

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Estimate income and continuing expenses for a realistic recovery period, including delays for repairs, equipment replacement, permitting, or relocation.

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