Business Interruption Insurance Explained
Most business owners insure the building and the contents. But if a fire or flood forced you to close for three months, the real damage isn't just the repairs — it's the income you lose while the doors are shut. That's the gap business interruption insurance is built to close.
Property cover pays to repair or replace what was damaged. It does nothing for the salaries, rent and bills that keep running while you can't trade. Business interruption (BI) cover steps in there — it's about keeping the business financially alive during the recovery, not just fixing the premises.
What is business interruption insurance?
Business interruption insurance helps replace the income your business loses when an insured event — such as fire, storm or water damage — physically disrupts your ability to operate. Instead of covering the damaged asset itself, it covers the financial consequences of being unable to trade normally while you get back on your feet.
What it typically covers
- Lost income or profit for the period your business can't operate as usual after an insured event;
- Ongoing fixed costs that don't stop just because trading has — rent, salaries, loan repayments and the like;
- Additional costs of working — the extra you spend to keep going, such as renting temporary premises or equipment.
Cover usually runs for an agreed "indemnity period" — the time you and your insurer estimate it would take to recover. Getting that period right is one of the most important parts of setting up the policy.
What it usually doesn't cover
BI cover is normally tied to physical damage from an insured event, so losses with no such trigger generally fall outside it. It's also not a substitute for the underlying property cover — the two work together. Exactly what is and isn't included varies by policy, which is where getting the structure right matters.
Why it matters
Many businesses can survive repairing a damaged building. Far fewer can survive months with no income while still paying staff and rent. Business interruption cover is what turns a potentially fatal event into a setback you can recover from.
How Excessible helps
As an FSCA-authorised broker, we help you work out a realistic indemnity period and sum insured, and arrange business interruption cover alongside your property and other business policies so there are no gaps between them. It often sits naturally with commercial property and wider business cover. Not sure what your current policies would actually pay out? Our free audit is a good place to start.