Business Interruption Insurance

Published: | Updated: September 25, 2016

Definition - 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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