Business Interruption Insurance

Updated: 09 June 2023

What Does Business Interruption Insurance Mean?

Business interruption insurance is insurance that protects businesses from losses in revenue due to an event that forces business operations to cease. Typically not a separate policy, it is sold as an addition to a main policy, such as a comprehensive package or commercial property insurance.

Insuranceopedia Explains Business Interruption Insurance

Unforeseen perils, such as natural disasters or fire, may put a stop to business operations, and there is often nothing business owners can do to stop them from shutting down their businesses temporarily. For example, if a fire occurs in a restaurant kitchen and destroys the cooking equipment, this will force the restaurant to close for a while.

The premium payment can be deducted as a business expense, and the reimbursement for lost income depends on the business’ past financial records and the specific coverage limits.

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