3 minute readBusiness
Business interruption replaces lost income and pays continuing expenses while your operation is shut down by a covered property loss. It is the coverage that determines whether a fire is a setback or the end of the business, and it is usually underpurchased.
What you need to know
How limits are set
Based on projected net income plus continuing expenses over a realistic restoration period, not last year's revenue alone.
Waiting periods
Many policies have a 48- or 72-hour deductible before coverage begins.
Extra expense coverage
Pays the cost of operating temporarily somewhere else, which is often more valuable than the income piece.
Common mistakes
- Setting property and income limits from rounded-down guesses instead of real numbers.
- Skipping hired and non-owned auto because the business owns no vehicles.
- Signing contracts that require limits or wording the policy does not provide.
- Letting subcontractor certificates lapse, which shows up at audit.
- Treating insurance as a one-time purchase while the business keeps changing.
When to talk to an agent
Talk to an agent before signing a lease or a major contract, when you hire your first employee, when revenue or payroll changes materially, and any time you add a service, location or vehicle.
Frequently asked
This article is general information, not a policy or a promise of coverage. What your policy pays depends on its specific terms, limits and exclusions. Ask us to review your actual policy before making a decision.