Business interruption insurance

A grease fire at a fast food restaurant destroys the kitchen and part of the seating area. A contractor tells the owner that renovation could take up to a year. While commercial property insurance covers the repairs, the owner can’t make money while the business is under construction. Business interruption insurance helps recoup the lost revenue and pay the employees' wages while the work is done.

A roof leaks during a rainstorm at an electronics store, causing a mold problem and making it impossible to serve customers. While the business is closed for renovations, it still needs to make rental payments on the store. Business interruption insurance covers these costs and provides business income coverage until the shop reopens.

A fire destroys a contractor's trailer, forcing him to withdraw from bids and miss his revenue goals. At the end of the quarter, the business still needs to pay estimated taxes on the revenue it made before the fire. A business interruption insurance policy covers these costs so the contractor can use their money to get the business up and running again.

A pipe bursts at a beverage manufacturing plant, flooding the office and factory floor and destroying walls, carpeting, furnishings, and equipment. The factory is forced to close for three months for renovation. Business interruption insurance helps the factory meet its payroll obligations and covers other expenses during the period of restoration.

An intruder breaks into a law firm, vandalizing the office and breaking several windows. The law firm is forced to relocate to a new office space until the windows and locks are replaced. Business interruption insurance pays for moving costs and rent at the new location.

To qualify for business interruption insurance, most insurance providers require that your business have a commercial location. If you operate your business out of your home, you likely won’t be able to add business interruption insurance to your business owner’s policy.

Other factors can also affect your business’s eligibility for business interruption insurance, including:

• Business classification or industry
• Previous business interruption claims
• Your location

Yes, you can add endorsements to your business interruption policy, such as:

Extra expense coverage pays for expenses above and beyond a business’s normal operating costs. This type of coverage funds "extras" – i.e., non-ordinary operating costs like leasing equipment, paying employees overtime, or hiring temporary workers – that can help keep your business open after a disruptive event.

Contingent business interruption insurance provides financial assistance when the loss of a primary supplier, partner, or customer affects your ability to do business. It pays for ongoing expenses while you search for a replacement. This rider makes sense if your business relies on:

• A single supplier or manufacturer to provide certain materials
• A few major customers to provide most of your revenue
• Other nearby businesses to attract customers

With Insureon, you can chat with a licensed insurance agent to make sure your policy includes everything you need. They can also help explain any confusing policy language.

In most cases, this policy will not cover losses related to the coronavirus pandemic. Business interruption insurance activates alongside a commercial property insurance claim, such as a fire, burst pipe, or other incident that causes physical damage to the building covered by your policy.

Insurance companies do not include protection against communicable diseases as standard coverage. For that coverage, you would have to purchase a communicable disease rider, and likely also prove the disease was present on your property. If you think your business might qualify for a claim, contact your insurance provider.

Learn more about COVID-19 business insurance coverage.