Does a Basic Business Insurance Policy Cover Business Interruption?

When running a business, it’s crucial to understand the scope of your insurance coverage. One common question is whether a basic business insurance policy covers business interruption. The answer is not straightforward, as it depends on the specifics of the policy.

Business Interruption Insurance Explained

A basic business insurance policy typically includes general liability and property insurance, at a minimum. General liability insurance can assist with legal expenses and damages if your business is sued for causing harm to others. Property insurance can help cover damage to your business property due to incidents such as fire, theft or severe weather. However, these offerings do not typically cover income loss from business interruptions.

Business interruption insurance is intended to fill this gap. It can help cover operating expenses and lost income if your business is temporarily unable to function due to a covered incident. This insurance can help cover costs like payroll, rent, and loan payments during the interruption period. Business interruption insurance is often available as an add-on or endorsement to a property insurance policy or as part of a business owners policy (BOP). Some insurers may offer it as a standalone policy, but this is less common.

When considering business interruption insurance, it’s essential to review the terms and conditions carefully. Coverage typically begins after a specified waiting period and continues until the business can return to normal operations up to the policy’s limit. Specific events, such as pandemics, may also be excluded from coverage.

Learn More

For business insurance near you, contact Thornburg Insurance Agency today.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.