What is business interruption insurance designed to cover?

Business interruption insurance is specifically designed to cover the loss of income that a business experiences when it is unable to operate due to a covered event, such as a fire. This insurance helps to compensate for the revenue that would have been generated if the business had continued to operate normally. It is particularly important for businesses that may have ongoing expenses, such as payroll and rent, which need to be maintained even during periods when revenue is not being generated due to the interruption of operations.

This type of coverage typically assists businesses in managing their financial obligations and maintaining continuity until they are able to resume normal operations. The focus is on the income loss rather than physical repairs or legal costs, which are covered by other types of insurance policies.