What is Business Interruption Insurance?

Business interruption insurance is an insurance coverage that can help to replace a portion of a business’s income in the event a covered peril occurs and causes a business to pause operations or temporarily relocate. It is important to note that business interruption insurance works with your commercial property insurance. For example, in the event that a fire, natural disaster, or theft, causes physical damage to your business’s property, your commercial property insurance may cover the costs of repair. If your company has to temporarily close or relocate while those repairs are being performed, business interruption insurance may cover a portion of your company’s lost income during some of that temporary period of closure or relocation. In this article you can find information about what business interruption typically insurance covers, how much it may cost, and some other coverages to consider.

What Does Interruption Insurance Typically Cover?

When your business is interrupted by a covered peril, there are some typical expenses that might be covered by business interruption coverage, subject of course to policy limits and conditions. These expenses usually revolve around lost profits and the costs your business may incur due to relocating for a period of time. The following are some common expenses that business interruption insurance may reimburse you for during the covered period:

• Lost profits
• Mortgage & Rent
• Taxes
• Employee Wages
• Loan Payments
• Advertising
• Training Costs
• Relocation Fees

How Long Can Business Interruption Insurance Last?

Often referred to as a “restoration period,” “period of liability,” or “period of indemnity,” business interruption insurance has a period of time that coverage begins and ends. This length of time that your policy will help to pay for lost income, etc. can be found in your specific insurance policy.

Are Business Interruption and Business Income Insurance the Same Thing?

Business interruption and business income insurance are generally interchangeable names for the same coverage. Insurance companies may use a different name depending on preference and branding.

How Much Does Business Interruption Insurance Cost?

What a business owner might pay per year to cover their business with business interruption depends on a variety of factors. Some of these include the number of employees your business has, where your business is located, and the industry your business is in. The types of insurance and the coverage limits you select will also determine your annual insurance costs. If your business has grown, you may want to think about increasing your coverage limits. At Cross Insurance, we help businessowners in a number of different industries, we would be happy to talk to you about your business and help find coverage options for you.

Other Coverages to Consider as a Business

As a business, you will need an array of insurance coverages to keep you and your assets protected. Some other types of insurance to consider are:

Workers’ Compensation Insurance – Can help cover medical bills and wages for employees who are injured or become ill because of work related events.

Commercial Property Insurance – Can protect your business’ building, equipment, inventory, and furniture.

Key Person Insurance – Can provide compensation to a company in the event the covered key individual (such as a high-level executive) passes away.

General Liability Insurance – Can provide coverage if your company causes property damage or bodily injury to third parties.

Professional Liability Insurance – Typically provides protection if a client believes a mistake you made, such as a missed deadline, caused financial loss.

In order to protect the investment you have made in your business, you should connect with a local insurance agent to discuss your options. Calling Cross Insurance or filling out this form may provide you the assistance you are searching for. 

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This article is for general informational purposes only and is not to be relied upon or used for any particular purpose. Cross Insurance shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, insurance, accounting or other professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article are that of its author and do not necessarily represent the views of Cross Financial Corp. and its subsidiaries and affiliates (“Cross Insurance”) or Cross Insurance’s management or shareholders.