What Is Covered By Business Interruption Insurance?

What Is Covered By Business Interruption Insurance?

If you’re a business owner, chances are good that you’ve considered buying a business interruption insurance policy. Business interruption insurance is one of the most common commercial insurance policies. It can help protect your company’s income in the event of unforeseen circumstances that affect your bottom line. This post will discuss what these policies typically cover and why they’re essential for small businesses.

Loss Of Income

If your business is shut down due to a covered business interruption, you will be compensated for the loss of income. This can include any revenue lost due to the disruption and additional expenses such as marketing costs and employee salaries.

Rent Expenses

A crucial part of doing business is paying rent, and a loss of income due to an interruption in operations can be devastating. If you rent your building from someone else, this coverage will reimburse your losses if there’s a fire or other covered event that makes it impossible for you to continue working there. This can be useful even if you own your building because a disruption in operations could force you out temporarily until repairs are made.

Business interruption insurance allows for coverage for specific periods of time as well as open-ended coverage with no pre-set limit on the maximum amount that can be paid out.

Business Reputation

Business interruption insurance covers loss of business reputation and loss of customer confidence. This coverage can be especially important for businesses that rely on repeat customers, such as restaurants or retail stores. If you have a physical location and your business is suddenly unable to operate at this location for an extended period, the resulting lack of business could mean the difference between making money and losing money.

Business interruption insurance also covers loss of market share and employee confidence. In some cases, an unexpected disruption like a fire or flood can cause companies to lose customers because they’re not confident that their needs will be met with the same standard after the facility reopens.

Extra Expense Coverage

Extra expense coverage (also known as “financial responsibility”) is for expenses that are not covered by the other types of business interruption insurance. Extra expense coverage can be used to pay for expenses such as additional rent for a temporary location, wages paid to employees who are not allowed to work because of the damage, and equipment damaged in the fire or flood.

Extra expense coverage is good if your business is seasonal and has a slow period during which you don’t need all your employees or facilities. For example, if you have an ice cream shop that doesn’t open until May 1st and stays open until September 30th each year, then extra expense coverage would be useful during the winter months when there isn’t any income coming in because customers won’t be buying ice cream from you at that time of year anyway. You could use this type of policy instead so that if something happened like an earthquake damaged your store’s structure and forced it closed temporarily before reopening again in springtime once repairs were completed on time with no further issues arising afterward (or even before).

Utility Expenses

If you have business interruption insurance, certain utility expenses are covered. Your coverage depends on the type of policy you have, but common examples include:

  • Electricity
  • Natural gas
  • Water/sewerage charges

As with all other types of claims, there is a limit on how much money your policy will pay for these expenses. After that limit has been reached, you will be responsible for paying any remaining costs out of pocket; if this happens and your business is closed or otherwise unable to generate income during this period (such as when it’s being repaired), you’ll likely need additional coverage from another source—such as an equipment breakdown policy.


Business interruption insurance is a great way to protect your business from losses caused by disasters or other events. If you have been struggling with finding the right business interruption insurance, then now is the time to take action and contact Stone Claims Group today!


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