Business Interruption Insurance
Business interruption insurance is a type of insurance coverage that helps businesses recover financially from losses due to a covered event that disrupts normal business operations. This coverage can provide financial assistance for lost profits, extra expenses incurred to continue operating the business, and other related costs.
The ISO (Insurance Services Office) form typically used for business interruption insurance is called the Business Income Coverage Form (ISO form CP 00 30). This form is used by insurers to provide coverage for loss of income resulting from a covered peril such as a fire, flood, or other unexpected events.
The Business Income Coverage Form typically includes coverage for the following:
Loss of income: The policy will pay for the actual loss of income that the business suffers due to a covered event. The coverage includes net income and any continuing expenses that are necessary to keep the business running.
Extra expenses: The policy will pay for any extra expenses incurred by the business in order to continue operations during the period of interruption. This could include costs associated with relocating the business, renting temporary space, or purchasing additional equipment.
Period of restoration: The policy will specify a period of time during which the insurance company will provide coverage for the loss of income and extra expenses. This period is typically based on the time it takes for the business to resume normal operations following the covered event.
It is important to note that business interruption insurance typically requires that a covered peril has caused physical damage to the business property, such as a fire, flood, or hurricane, in order to trigger coverage. Additionally, some policies may include exclusions or limitations on coverage for certain types of events, such as pandemics or cyber attacks. It is important to review the specific terms and conditions of the policy before purchasing business interruption insurance.