The purpose of business interruption insurance is to help cover income loss during a period of interruption. It can enable businesses to continue operations, manage ongoing expenses and recover from setbacks more quickly. By safeguarding against the financial impact of interruptions, business interruption insurance helps ensure business continuity, maintain customer trust and provide peace of mind to business owners, allowing them to focus on rebuilding and getting back on track.
What Is Business Interruption Insurance? 
Business interruption insurance can help cover lost income and ongoing expenses when a business cannot operate due to covered perils, such as fire, certain natural disasters, equipment breakdown or other unforeseen events. Business interruption insurance typically covers the profits an organization would have earned without disruption and fixed expenses like rent, utilities and employee wages.
What Does Business Interruption Insurance Cover?
Business interruption insurance is primarily designed to cover the financial losses a business may experience due to a temporary interruption in its everyday operations. The following are key areas that business interruption insurance may cover:
- Lost Income
- Ongoing expenses
- Temporary relocation costs
- Extra expenses (e.g., overtime wages, expedited shipping or costs associated with finding alternative suppliers), as outlined within the specific policy
It’s important to note that each policy may have specific terms, conditions and coverage limits, so reviewing the policy and understanding its coverage details is essential. Notably, business interruption insurance may include exceptions for certain situations, such as those involving floods or earthquakes.
How Does Business Interruption Insurance Work?
Business interruption insurance typically pays out if the cause of the business income loss is covered in the underlying policy. The policy has coverage limits, and the amount an insurer pays is determined by assessing the business’s financial records before and after the covered event. There’s typically a waiting period before coverage begins, and premiums vary depending on factors such as the type of business and location.
How Much Does Business Interruption Insurance Cost?
The cost of business interruption insurance varies based on a number of factors, including the business’s industry, location, number of employees, selected coverage levels and potential risks. For example, if your business is in an area with an increased risk of fire, you may have to pay more for additional coverage.
Business Interruption Insurance in St. Louis, MO
Contact The Meyer Group Inc. today to discuss your business insurance options. We can help you get the coverage you need to be prepared for the unexpected and provide you with peace of mind.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.