Business interruption insurance covers income loss and expenses incurred after a specified covered peril interrupts regular business operations. It is insurance that covers the loss of income that a business suffers following a disaster.
It differs from property insurance in that property insurance only covers physical harm to the company. In contrast, the additional cover allocated by the business interruption insurance covers the profit that would have been earned. This policy provision applies to all kinds of businesses, as it was designed to place a company in the same financial position it was in if no loss had occurred.
This kind of coverage isn’t sold as a standalone policy but could be added to the company property insurance contract or comprehensive package policy like a business owner’s policy. However, since business interruption is included as part of the company’s primary policy, it only pays out if the overarching policy covers the leading cause of the loss.
Based on the insurance contract, this coverage extends until the end of the company interruption period. Most insurance plans define this period as being from the date of the covered danger, and the damaged property is restored and returned to operations under the same condition that existed before the disaster.
Additionally, businesses can buy contingent business interruption coverage, which pays when a business cannot operate gainfully because of an event that damages the company premises of one of its suppliers or clients, thus preventing it from participating in regular trade.
Most business entities have insurance covering physical damage to their structure and valuable property if their business is damaged by fire or natural disaster. Likewise, some services have business interruption insurance, also called business earnings insurance, covering lost revenue and continuing expenditures.
2021 Best business Interruption Insurance Companies
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