What is business interruption insurance?
Business interruption (BI) insurance replaces the income your business loses and covers continuing expenses — rent, payroll, loan payments — when a covered loss like a fire, flood, or major equipment failure forces you to close or scale back while you recover. It's what turns a property claim into survival: property insurance rebuilds the premises, and business interruption keeps the business alive while that happens.
Why is business interruption so important?
Rebuilding takes months, but your fixed costs don't pause. Without BI, a covered fire or flood can end an otherwise healthy business even though the building itself is insured. For a dental or medical practice, a restaurant, or a retail shop, the lost income during closure is often a bigger threat than the physical damage itself.
What does business interruption cover?
Typically: lost net income you would have earned, continuing fixed expenses (rent, wages, loan payments) during the restoration period, and sometimes extra expenses to get running faster (e.g. a temporary location or rented equipment). It's triggered by a covered physical loss, and pays for the reasonable time it takes to restore operations, up to your limit.
How much business interruption coverage do I need?
Enough to cover your income and fixed costs for the realistic time a major loss would keep you closed — often 6–12 months or more for a serious rebuild. Under-insuring here is common and dangerous. We calculate it from your actual revenue and fixed costs, not a round number, and match the restoration period to how long your specific business would take to recover.
FAQ
Is business interruption automatic? It's an add-on to a commercial policy and should be sized deliberately — many businesses are under-covered. Does it cover a slowdown, or only a full closure? It can respond to a partial loss of income, not just a total shutdown, depending on the policy. Did it cover COVID closures? Generally no — most BI requires direct physical damage; pandemics are typically excluded. We'll be clear about what triggers yours.