Your business can't generate revenue if it can't operate. Whether it's a fire, earthquake, major equipment failure, or supply chain collapse, business interruption insurance replaces your lost income and covers continuing expenses while you recover.
How Business Interruption Works
Business interruption (BI) insurance, also called business income coverage, pays for net income you would have earned plus ongoing fixed expenses (rent, loan payments, payroll) during the period your business can't operate due to a covered peril. The "restoration period" starts when the damage occurs and ends when the business could reasonably resume operations, even if you choose to take longer.
Extra Expense Coverage
Sometimes you can keep operating — but at higher cost. Renting temporary space, expediting equipment shipments, or paying overtime to meet deadlines all create extra expenses. Extra expense coverage pays these additional costs above your normal operating expenses, helping you maintain customer relationships and revenue during a disruption.
Contingent Business Interruption
What if the disruption isn't at your location, but at a key supplier or customer? Contingent BI coverage protects against income loss caused by covered events at your supply chain partners' locations. For businesses dependent on a single supplier or a few key customers, this coverage can be as important as standard BI.
Frequently Asked Questions
Is business interruption included in my property policy?
Sometimes as a sublimit, but often not at adequate levels. Many property policies include basic BI coverage, but the limits may be far below your actual exposure. We evaluate your revenue, fixed costs, and recovery timeline to determine appropriate BI limits.
How long does business interruption coverage last?
Most policies have a 12-month maximum restoration period, though extensions are available. The key is ensuring your coverage period matches a realistic recovery timeline for your specific situation.
Does BI cover pandemic-related closures?
Most current BI policies require physical damage to trigger coverage, which excludes government-ordered closures without physical damage. Some specialty policies now offer communicable disease coverage, though availability and terms vary.