What risk does "business interruption insurance" primarily address?

Business interruption insurance is designed to protect businesses from the financial losses that occur when they cannot operate as a result of a covered disaster or peril, such as fire, storm, or vandalism. When a business is forced to cease operations temporarily, this insurance provides coverage for lost income that the business would have earned during that interruption period. It also typically covers ongoing expenses that must still be paid, such as rent and utilities, even while the business is not generating revenue.

The focus of business interruption insurance is on the inability to continue normal operations due to events that threaten the operational integrity of the business. This differentiates it from other types of insurance, such as property insurance, which more directly addresses the loss of physical assets. While factors like increased operational costs or loss of market share can affect a business's overall financial health, the primary risk addressed by business interruption insurance is the immediate impact on operational capability and the associated loss of income during periods of downtime.