August 23, 2022

Business Interruption Coverage

Also called Business Income Coverage is a standard feature on many Business Owners Policies [BOP] in the United States. Sometimes called BI for short – Busienss Owners should inquire with their agent about the need for this specific coverage.

According to Allstate “Business Interruption Coverage helps replace lost income and pay for extra expenses when a business is affected by a covered peril.” It is imperative that Executives under the ‘covered peril’ portion of the requirement. If the lost income / business occurs due to a non covered peril – than there would be no payable claim.

Business Insurance policies are different, so please read your own when considering adding, ammending, or deleting this coverage. In general there are two components of BI Coverage on Business Owners Policies:

1. Lost Income
2. Extra Expense

Again, these are both from a covered peril. According to the Harford, the following expenses may be covered: “Training Costs, Relocation Costs, Payroll, Taxes, Loan Payments, Mortgage/Rent/Lease, and Revenue.”

Most Business Income coverage forms have a specific waiting period. This waiting period is similar to a deductible. You must wait this period of time before you can realize the coverage. Read your policy for your specifics. This waiting period is often 48 to 72 hours.

There are lots of exclusions for this coverage, so read your own policy. Additionally – the purpose of insurance is to bring you back to as close to whole as you were before the event, not ahead. This a long way of saying that the insurer’s coverage for BI is more complex than other coverage forms.

How to Get Business Interruption Coverage? Call your insurance agent and inquire.