Business interruption insurance covers the loss of income that a business suffers after a disaster.

The object of insurance is the policyholder’s financial losses; appearing due to the forced cease of business or diminishing it’s extent because of the destruction, damage or loss of the property used for business during the insurance event.

The following are typically covered under a business interruption insurance policy:

  • Profits. Profits that would have been earned;
  • Fixed costs. Operating expenses and other costs still being incurred by the property;
  • Temporary location. Some policies cover the extra expenses for moving to, and operating from, a temporary location.
  • Extra expenses. Reimbursement for reasonable expenses (beyond the fixed costs) that allow the business to continue operation while the property is being repaired.