Business Interruption Insurance (also known as Business Income Insurance) covers the loss of income that a business suffers after a disaster while its facility is being rebuilt. A property insurance policy covers only the physical damage to the business, while the additional coverage allotted by the business interruption policy covers the profits that would have been earned. This extra policy provision is applicable to all types of businesses, as it is designed to put a business in the same financial position it would have been in if no loss had occurred.
This type of coverage is not sold as a stand-alone policy, but can be added on to the business’ property insurance policy or comprehensive package policy. Since business interruption is included as part of the business’ primary policy, it only pays out if the cause of the loss is covered by the overarching policy.
Restaurant and bar owners in the Bay Area need to make sure this is built into your Business Owners or General Liability policy. If you have any questions concerning this coverage and how it may apply to you, please send me an email.