In what scenario is "interruption insurance" typically necessary for a business?

Interruption insurance, also known as business interruption insurance, is specifically designed to cover the loss of income that a business might suffer when it is temporarily unable to operate due to a covered peril, such as fire, theft, or natural disasters. This type of insurance helps protect against the financial impact of downtime, allowing businesses to pay ongoing expenses like rent, salaries, and fixed costs even when they are not generating revenue.

In the context provided, the scenario where a business is temporarily unable to operate due to damage from a covered peril is a classic situation that necessitates interruption insurance. It serves as a safeguard against the unexpected disruptions that can severely affect a company's financial stability and operational continuity.

The other scenarios outlined do not directly pertain to the typical need for interruption insurance. For instance, failed marketing strategies may result in reduced revenue, but they do not physically inhibit the business's ability to operate; thus, interruption insurance would not apply. Similarly, wanting to expand into new markets or exceeding revenue projections are growth strategies and business performance scenarios, which do not relate to coverage for operational interruptions caused by unforeseen events.