Without long-term and concrete protection from the business risks and threats, such unexpected occurrences may wreak havoc on your business plans and/or financial stability. That’s why getting appropriate business insurance coverage is paramount advice to take into account.  

While there are selections of insurance coverage to choose from, this article prefers to tackle business interruption insurance. Thus, take a few more scrolls and find out more about the business interruption insurance and why you possibly need one for your firm.   

Business interruption insurance

Business interruption insurance, also known as business income insurance, is a type of business insurance coverage that takes over a certain income lost due to an abrupt and unfortunate disaster. In other words, this business insurance coverage compensates companies who are forced to cease their operations in the event of loss and damage to the business property or due to the interruption in their business efforts. 

Generally, business interruption insurance is bound to the so-called Business Owner’s Policy (BOP). Along with the business interruption insurance are the general liability insurance, and commercial property insurance or property insurance.

Business interruption insurance coverage

  • Lost income

Your enterprise may stop producing enough income once certain damage affects your business efforts such as serving your consumers, selling your offered products and/or services, and even working with your dear clients.

However, if you acquire business interruption insurance beforehand, this insurance coverage will compensate your enterprise for the lost income. Business interruption insurance commonly compensates the lost revenue up to a year. 

  • Rent or lease costs

The next inclusion in the business interruption insurance is the costs of rent or lease. May it be the rent costs of your business’ building, equipment, and anything that you don’t own that’s included in your daily business operations. 

Let’s say your business shuts down [for no one knows until when], you shouldn’t presume that the landlord will allow you to miss your monthly rent obligations. 

And that’s where the business interruption insurance can help you out. While you’re working on restarting your business once again, the said business insurance coverage will take over your monthly rent or lease responsibilities. 

  • Temporary relocation expenses

Losing your old business’ site or location permanently may happen, especially if the damage or occurrences severely affects your business’ usual operations. While this instance could be a bitter pill to swallow, know that with business interruption insurance, you can reopen or restart your business once again, but in a new location this time. 

Business interruption insurance will help you and your business with the relocation process such as the moving expenses, and even the monthly costs of rent for the new business location for the meantime.

Take note that this business insurance coverage only works on the permanent loss of the original business’ location or site. 

  • Workers’ wages

Next, we have the workers’ wages. Companies of all shapes and sizes may go through a challenging time too. And even in times of facing uncertainties, employers still want to keep their excellent and/or potential employees. 

That may seem tough, especially if your business isn’t producing enough revenue to pay for your workers’ monthly salaries. However, availing business interruption insurance will help you through paying for your workers’ wages. 

And just like how the said business insurance coverage can compensate for your companies’ lost revenue for likely a year, it can also cover your workers’ wages for a year while you’re rebuilding your business. 

  • Taxes

In the event that your business is forced to shut down temporarily, know that your legal obligations such as paying your quarter and annual taxes continues. This may seem challenging, especially if you’re on the verge of losing your business. 

But, such issues in complying with your quarter or annual taxes can be resolved with the help of business interruption insurance. 


Kath Ramirez embraced the dream of being a writer since she was in 4th grade. She took it seriously and she now writes for Insurance Advisernet New Zealand, one of the top financial and insurance companies in NZ. Aside from writing, Kath also keeps herself busy spending time with her family, cherishing the role of a dog mum, reading random books, and diving into the world of photography. She’s not even a pro at whatever she’s engaged in right now, but one thing she knows, she’s happy and that’s more than enough.