Business Interruption Insurance
Business interruption insurance is coverage that addresses loss of income and certain continuing expenses when normal business operations are interrupted by a covered cause of loss.
Definition
Business interruption insurance is a form of commercial insurance coverage that compensates an insured business for income loss and specified operating expenses resulting from a temporary suspension or reduction of operations caused by a covered physical loss or damage.
Structural Components
- Coverage trigger tied to a covered cause of loss
- Measurement of lost business income
- Continuing operating expense provisions
- Defined restoration or indemnity period
- Policy limits and sublimits
Parameters & Conditions
- Requires an interruption caused by a covered peril
- Typically dependent on underlying commercial property coverage
- Applies only during the defined restoration period
- Subject to waiting periods and deductibles where applicable
- Limited by stated policy limits and endorsements
Topic Relationships
Exceptions, Limitations & Boundaries
Business interruption insurance does not apply to losses unrelated to a covered cause of loss, interruptions occurring outside the policy period, or reductions in income caused by excluded events or market conditions. Coverage scope may be further restricted by exclusions, waiting periods, and policy definitions.