What condition is typically required for business interruption insurance to be applicable?

Business interruption insurance is designed to cover the loss of income that a business suffers after a disaster such as a fire, flood, or another event that causes physical damage to its property. The fundamental condition for this type of insurance to be applicable is that there must be a physical loss or damage to the insured property that interferes with the business's operation. This loss is essential, as the insurance compensates for the income lost during the period when the business cannot operate as usual.

Without physical damage to the property, there would be no justification for claiming business interruption; hence, this criterion is a cornerstone for the insurance's applicability. While having multiple locations, employee illness, or a minimum operation period might impact business continuity, they do not directly trigger business interruption coverage like physical loss or damage does.