What is included in business interruption insurance?

Business interruption insurance is specifically designed to cover the financial losses that a business experiences during a period of disruption. This insurance provides reimbursement for lost income when a business is unable to operate due to circumstances like natural disasters, fire, or other unforeseen events.

When a business faces a temporary closure or reduction in operations, it can lose significant revenue. Business interruption insurance helps to mitigate this loss by covering the income that would have been earned during the interruption, as well as certain ongoing expenses that still need to be paid, such as rent or utilities, even when the business is not operational. This financial support is crucial for maintaining cash flow during challenging times and ensures that the business can recover and resume its operations more smoothly.

Other options, while related to business operations and risk, do not pertain directly to the specific purpose of business interruption insurance. Coverage for theft, long-term disability, and legal fees are typically included in different types of insurance policies and do not address the income loss that occurs when a business is temporarily unable to operate.