Business Interruption Insurance
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What is Business Interruption Insurance? Meaning.
Business Interruption Insurance is a form of business insurance to protect companies against the loss of income after events (disasters) that temporarily interrupt business operations. The coverage of this type of insurance covers the profits that would have been earned should the event not have taken place, while a regular commercial property insurance only covers the physical replacement damage to the business. Business interruption insurance helps companies to avoid bankruptcy caused by unpredictable loss of profits.
Typically this type of coverage is not sold as a stand-alone insurance policy, but as an addition to a business property insurance policy or comprehensive package policy.
Business interruption insurance is also known as:
History of Business Interruption Insurance
The first form of business interruption insurance can be found in France around 1860 with the 'Chomage' (which means standing still or idle as in a factory or a stoppage or cessation of labor). The first real business interruption insurance was developed in the United Kingdom.
Causes of business interruption
A company may face a loss because of unpredictable events such a fire, natural disaster, theft, vandalism or other insurable causes. It is important to note that this insurance is against the consequences of such perils, i.e. the interruption of profits generation.
Business interruption insurance is an additional policy that can be included in an existing one and it is applicable to all kind of companies. Business interruption insurance could be also very important in case of large investments for a company.
Conditions Business Interruption Insurance. Terms
Types of Business Interruption Insurance. Categories
There are various types of business interruption coverage available. Generally, business interruption insurance may cover:
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