The purpose of business interruption insurance is to help cover income loss if a business can’t operate due to a covered loss. It allows businesses to continue operations, manage ongoing expenses and recover from setbacks more quickly. By safeguarding against the financial impact of interruptions, business interruption insurance ensures business continuity, helps maintain customer trust and provides peace of mind to business owners, allowing them to focus on rebuilding and getting back on track.
What Is Business Interruption Insurance?
Business interruption insurance, or business income insurance, protects businesses from financial losses resulting from interruptions or disruptions to their everyday operations. It helps cover lost income and helps businesses cover ongoing expenses when they cannot operate due to covered perils, such as fire, natural disasters, equipment breakdown or other unforeseen events. Business interruption insurance typically covers the profits an organization would have earned without disruption and fixed expenses like rent, utilities and employee wages.
What Does Business Interruption Insurance Cover? 
Business interruption insurance is primarily designed to cover the financial losses a business may experience due to a temporary interruption in its everyday operations. If a covered loss forces a business to shut down temporality, interruption insurance can help cover operating expenses, such as the following:
- Revenue
- Mortgage, rent and lease payments
- Loan payments
- Taxes
- Payroll
- Relocation costs
- Extra expenses
- Training costs
It’s important to note that each policy may have specific terms, conditions and coverage limits, so reviewing the policy and understanding its coverage details is essential.
How Does Business Interruption Insurance Work?
Business interruption insurance commonly provides compensation when the reason for the loss of business income aligns with the covered events outlined in the underlying policy. The payout is typically determined by examining the historical financial records of the business. The coverage remains in effect until the conclusion of the business interruption period, as specified in the policy. The policy coverage is typically for 30 days but can be extended to 360 days if the proper endorsements are in place. Most business interruption policies define this period as the date the covered peril began and lasts until the damage is physically repaired.
What Does Business Interruption Insurance Cost?
Business interruption insurance costs depend on various factors, including the industry, location, number of employees and potential risks. For example, if your business is in an area with an increased risk for hurricanes, you may have to pay more for coverage.
Business Interruption Insurance Quote in Jackson, TN
If you are ready for a business interruption insurance quote, contact FSB Insurance. We can help you get the coverage you need to operate your business confidently.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.