Business Income coverage (or Business Interruption coverage) provides protection against financial losses that are sustained while a business is unable to operate because of property damages.
What you should know
- Business Income coverage is a type of property insurance that is triggered by a direct physical loss of or damage to property by a covered cause of loss.
- A communicable disease (like COVID-19) may not be covered without a physical loss of or damage to property.
- Civil Authority coverage is a related property insurance that applies to situations where access to an insured’s property is prevented or prohibited by an order of civil authority because of physical damage.
- “Business Income” is defined as the net income plus the normal continuing operating expenses of a business.
- The “period of restoration” begins when a business is forced to suspend its operations because of damages and ends when the covered damages are (or reasonably could have been) repaired.
- Business Income coverage is different from property insurance in that property insurance only covers the physical damage to the business (not profits or payroll).
- The cost for coverage is determined by: the business size, coverage limit, and the risk of natural disasters in the area where the business is located.
- Common reasons for Business Income claims include fires, tornadoes, explosions, industrial accidents, chemical/hazardous material spills and other natural or loss scenarios.
- Business Income coverage typically WILL provide coverage for:
- Lost income
- Normal operating expenses that need to continue
- Moving or temporary location fees
- Business Income coverage typically WILL NOT provide coverage for:
- Income that isn’t documented
- Losses from partial closures
- Closures from downed power lines
- Business income from a cyber incident is covered by a specific cyber business income policy
- Have a business continuity plan. How will your business endure a catastrophic loss? Use our Business Income Expense Worksheet to plan ahead.
- Contact your Cox Insurance commercial team to confirm that your package policy includes Business Income coverage or discuss your options for adding it.
- If you think you have a claim, it is best to let the carrier to make an official ruling based on how your policy would respond in these circumstances. Please reach out to us for help in submitting it to the carrier.
Cox Insurance provides Home, Auto, Liability and Commercial insurance that exceeds expectations. For a personalized quote, please contact us here.