Business Income Insurance
Business income insurance can help pay bills and cover payroll.
If your business is forced to close temporarily due to direct physical loss or damage to property from a covered cause of loss, business income insurance can help you:
- Replace lost net income during the period of restoration that you would have earned if no physical loss or damage had occurred
- Pay for necessary continuing normal operating expenses, including ordinary payroll expenses
- Pay for relocation expenses and advertising fees if you set up shop at a temporary site
Business income insurance works with your property policy and provides coverage for events beyond your control such as fire, wind, hail, vandalism or damage from vehicles or aircraft that may cause direct physical loss or damage to covered property which interrupts your business. Flood, earthquake or glass breakage are typically not covered in a business income policy.
Options and endorsements for your business income may include:
Business Income from Dependent Properties covers your actual loss of business income from a necessary suspension of your operations due to direct physical loss or damage, from a covered cause of loss, to property operated by others upon whom you depend, such as:
- Your suppliers, who are thereby unable to deliver materials or services to you, or to others on your account
- Your customers, who are thereby unable to accept your products or services
- Companies, who are thereby unable to manufacture products for delivery to your customers under contract of sale
- A company, who is thereby unable to attract customers to your business
Extra expense coverage
If your company is temporarily shut down due to direct physical loss or damage to property at a described premises, extra expense insurance will cover expenses you incur during the period of restoration to avoid or minimize the suspension of your business.
A utility services endorsement extends Business Income and/or Extra Expense coverage to apply to a suspension of your operations caused by a disruption of basic utility services to your premises. Example include electric, gas or water provided by public or private utility companies.
Civil authority coverage extends Business Income and/or Extra Expense coverage when a covered cause of loss causes damage to property other than your property and a civil authority prohibits access to the area immediately surrounding the damaged property, which in turn prohibits access to your business.
What can't business income insurance cover?
While business income insurance can help with certain costs associated with closing your doors for an extended period of time, there are a few exclusions. Most companies will not be able to provide coverage for:
- Any income that is not documented
- Losses not included within your property insurance policy, including floods or earthquakes
- Closures from power lines
Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which are controlling. Such terms and availability may vary by state and exclusions may apply. Discounts may not be applied to all policy coverages.