Business Interruption Insurance for When Operations Stop but the Bills Don't.

What Is Business Interruption Insurance?

Business interruption insurance — also called business income insurance — replaces lost revenue and covers ongoing operating expenses when a covered property loss forces a business to slow down or shut down temporarily. It is typically offered as part of a commercial property policy or Business Owner's Policy (BOP), rather than as a standalone product, though it can sometimes be purchased separately.

Coverage generally kicks in when a physical loss or damage to your property — from a covered peril like fire, windstorm, or vandalism — causes a disruption to your business operations. The policy typically covers lost net income you would have earned, fixed operating expenses like rent and utilities, payroll for employees during the closure, and extra expenses incurred to minimize the interruption, such as renting temporary space.

Business interruption insurance is particularly important for businesses that depend on a physical location to generate revenue — retailers, restaurants, manufacturers, service businesses with a brick-and-mortar presence, and any operation where a facility shutdown directly translates to lost income. The coverage period typically lasts until the business is restored to its pre-loss operating condition, up to the policy limit. Note that business interruption insurance does not typically cover closures caused by pandemics, utility outages, or government orders unless a specific endorsement is added.