Business Interruption Insurance (also known as “Business Loss Insurance”) is a type of insurance coverage that business owners purchase to cover the loss of business income following a business interruption, such as a natural disaster or pandemic.
Whereas property insurance typically covers physical damage to a business, business interruption insurance covers the profits that a business would have been earned if not for the interruption. The intent of business interruption insurance is to put a business in a similar financial position as it would have been in without the interruption.
Although all insurance policies differ, many business interruption insurance clauses cover:
- Lost profits
- Fixed costs
- Temporary relocation
- Additional expenses