Business interruption insurance

Business interruption coverage, sometimes called business income coverage, is the part of a property policy that keeps the lights on after a loss. It is designed to put the business roughly where it would have been financially if the damage had never happened, covering lost net income plus the expenses that keep running whether you are open or not, things like payroll, rent, and loan payments.

The word that decides most claims is trigger. Standard business income coverage requires direct physical damage to covered property from a covered cause of loss. A slow month does not trigger it. A supplier problem does not trigger it without a dependent property extension. Even smoke drifting from a neighbor's fire, with no damage to your own building, generally does not trigger it, which surprises owners who assume that being unable to operate is the same thing as being covered.

Two details worth knowing before you need them: the period of restoration, which is the window the policy will actually pay for and is usually tied to how long repairs reasonably should take rather than how long they do take, and any waiting period that must pass before coverage begins.

Related terms

This page is education, not advice. Policy language varies by carrier, form, and state, so confirm how your own program is written with a licensed insurance professional.