business income insurance

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Last updated

June 22, 2026

Quick Summary

Business income insurance, also known as business interruption insurance, is a type of coverage designed to reimburse a business for lost profits and continuing fixed charges that occur as a result of direct damage to the insured premises from specified perils. This insurance is crucial for businesses that experience a total or partial suspension of operations due to events like fires or other covered damages.12

For example, if a retail store suffers a fire and must close for a period, business income insurance would help cover the revenue lost due to the inability to make sales. It also covers essential fixed costs, such as salaries and taxes, that continue even when the business is not generating income. This type of insurance is a key component of business property insurance, addressing indirect losses that stem from direct property damage.2

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insurance
Indirect losses
…include the following: (1) contingent business income insurance, designed to cover the consequential losses if the plant of a supplier or a major customer is destroyed, resulting in either reduced orders or reduced deliveries that force a shutdown of the insured firm, (2) extra expense insurance, which pays the additional…
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…include the following: (1) contingent business income insurance, designed to cover the consequential losses if the plant of a supplier or a major customer is destroyed, resulting in either reduced orders or reduced deliveries that force a shutdown of the insured firm, (2) extra expense insurance, which pays the additional…
Read More