What Happens to Your Business After a Shutdown?

How Business Interruption Insurance Works

When a disaster forces your business to close temporarily, the bills don’t stop. Rent, payroll, utilities, and loan payments can continue even when income slows down or disappears. That’s where business interruption insurance can make a major difference.

What Is Business Interruption Insurance?

Business interruption insurance helps replace lost income when your business can’t operate because of a covered event, such as:

• Fire
• Storm damage
• Theft or vandalism
• Certain types of property damage

It’s commonly included with a commercial property policy or Business Owner’s Policy (BOP).

What Does It Cover?

This coverage may help pay for:

• Lost business income
• Rent or lease payments
• Employee payroll
• Loan obligations
• Taxes and operating expenses
• Temporary relocation costs in some cases

The goal is to help keep your business financially stable while repairs are being made.

How Does a Claim Work?

If a covered event damages your business property and forces you to pause operations, you file a claim with your insurance company. Your insurer reviews:

• Financial records
• Revenue history
• Operating expenses
• Estimated recovery time

Coverage typically applies during the “restoration period,” which is the time needed to repair and reopen the business.

What’s Usually Not Covered?

Business interruption insurance typically does not cover:

• Floods or earthquakes without separate coverage
• Undocumented income
• Normal slow business periods

Why It Matters

Many business owners focus on repairing the building, but forget about replacing lost income. Without this coverage, even a temporary shutdown can create serious financial stress.

Final Tip

Your business may recover from physical damage—but recovering financially is another challenge. Reviewing your commercial insurance now can help ensure your income is protected before the unexpected happens.