What is Business Income Insurance?
Business Income Insurance, also known as Business Interruption Insurance, covers the loss of income a business experiences when it cannot operate due to damage to its property. This type of insurance is essential for businesses that rely heavily on physical locations or equipment to generate revenue. It typically covers operating expenses, payroll, and lost income during the period the business is unable to function.
For example, if a fire damages a restaurant, preventing it from operating, Business Income Insurance would cover the income lost during the repair period. It may also cover the expenses associated with relocating temporarily or continuing operations in a different location.
This insurance is especially important for businesses that cannot easily replace lost revenue through other means, as it helps ensure financial stability during the recovery process. It’s often included as part of a broader commercial property policy or a business owner’s policy (BOP).
Business Income Insurance does not typically cover losses from natural disasters unless specific additional coverage is purchased. The coverage period usually extends until the business is able to resume normal operations, though it may have limits depending on the policy.
