What is Business Interruptions Insurance?

What is Business Interruptions Insurance?

Many commercial property insurances may have an additional endorsement on their policy that adds coverage for income loss and/or profits in the event of loss or damage to their business. This endorsement may protect the business owner for losses the business sustains as a result of a direct loss, damage, or destruction to the insured property. However, for coverage to be in effect the event usually has to qualify as a covered event or covered peril.

What Can Business Interruption Insurance Cover?

As stated above, business interruptions insurance can replace lost income and/or lost profits in the event of a covered loss. If a business is wholly or partially damaged, resulting in a physical loss of the insured’s premises, the carrier may be liable to the insured for the reduction in the net income. The carrier may pay the insured an amount based on the loss, and usually no higher than the policy limit, for the period of time in which the business’s daily operations were suspended. Business interruptions insurance may also help a business owner recoup some costs in the event he or she has to temporarily move locations due to a covered loss. Since the move can allow the owner to continue business operations, they may not be eligible for all expenses, costs, or lost income, but only a portion.

If your business has sustained a loss due to damage or destruction, you may want to confirm if you have a business interruptions endorsement. You should also consult with an experienced insurance attorney to help you understand the coverage of your policy, as well as guide you through a potential claims process.

The Law Office of Craig A. Blumberg is an experienced New York City insurance law firm. If you require quality assistance after having suffered property loss, please contact our firm to schedule a free initial consultation.