Business Interruption Insurance

Business Interruption Insurance (also called business income coverage) helps replace income you lose when a covered property loss shuts down or slows operations. If a fire, windstorm, or other insured peril damages the building and you cannot rent units, occupy offices, or keep the business open, this coverage can pay lost net income and continuing expenses—such as payroll, loan payments, and taxes—during the restoration period. Many policies also include extra expense, which pays the reasonable cost of temporary space, expedited repairs, or other steps that shorten the shutdown. Coverage is tied to a property claim: if the underlying peril is not covered, business interruption generally is not either.

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It does not pay for a downturn in the market, a tenant leaving for other reasons, or a flood unless flood is separately insured and the form extends to it. Time limits matter: policies use a waiting period (often 72 hours) before benefits start and a period of restoration that ends when the property should reasonably be repaired, not necessarily when every tenant is back. For commercial real estate the key points are whether the form covers rental value as well as business income, how civil authority and ingress/egress apply after a wide-area storm, and whether limits and the indemnity period are long enough for a major rebuild. Owners should match this coverage to the property policy so income protection and building coverage start and stop on the same loss.