Basics of Business Interruption Insurance

Forty percent of small businesses close their doors following a disaster and never reopen. Preparation means making sure you’re covered when the unexpected arises.

Business interruption policies cover the total loss of income after a disaster or business disruption that closes a business and necessitates rebuilding to get up and running again.

Business interruption policies cover the total loss of income after a disaster or business disruption that closes a business and necessitates rebuilding to get up and running again.

Property Insurance + Business Interruption Insurance

Property insurance covers the replacement or repair of your business’s damaged physical property. It takes a physical loss or damage to property to trigger the coverage. Policies vary depending on the type of event leading to a loss and what, specifically, is insured.

Business interruption starts where property insurance leaves off. When the physical loss affects the operation of the business, it covers the lost net profit and continuing business expenses.

It’s also worth asking if your business would benefit from extra expense coverage as part of your business interruption coverage solution. This means you’re covered for any costs — in excess of normal operating expenses — that will help get you back in business sooner.

General Liability +Business Interruption Insurance

With this coverage, your business is insured for claims of tangible property damage, bodily injury and advertising injuries that result from your products and/or business operations. There is no direct connection between business interruption and your liability insurance. Business interruption only kicks in for situations in which your property is damaged. General liability kicks in if you are responsible for injuring people or damaging their property.

Even though the two types of coverage are not connected, they are both considered an integral part of a robust insurance program. When facing a claim, it could be a major advantage to have both. 

To learn more, download HUB's Business Interruption Supplement Guide.