Do I Need Business Interruption Insurance

Running any company can be complicated. That’s why having the right kind of business insurance is crucial. But on top of the traditional policies, is there anything else you need? Business interruption insurance, or sometimes called business income insurance, is a crucial policy that could be a lifesaver if you have to close your business unexpectedly for a temporary time period. Read on to learn more.


What is Business Interruption Insurance?

Business interruption coverage would replace business income lost in the event of a disaster. The events usually covered are things like fires and natural disasters. It’s not a separate policy, but instead additional coverage that is added or included in your property or casualty policy. It could also be included in a comprehensive policy as an add-on or a rider.

How does it work?

The premium for your business interruption insurance, or the additional cost of the rider, are considered tax-deductible and count towards business expenses. The policy will only pay out if the cause of the income loss is listed as covered in your property or casualty policy. Your past business financial records usually determine the amount paid to you. The coverage usually lasts until the end of the period, which will be listed in your policy. Most policies are for 30 days but check with your agent for specifics. Keep in mind that there may be a waiting period of up to three days.

What does it cover?

Here is a breakdown of what most business interruption coverage includes:

 Revenue you’d typically make if your business was open

  • Mortgage, rent, or lease payments
  • Loan payments
  • Taxes
  • Payroll for your employees
  • Relocation costs
  • Training costs for new equipment


Think you may need business interruption insurance? Give us a call today! We can make sure you have all the coverage your business needs.