Basics of business interruption insurance: The ins and outs of tricky coverage

HEADNOTE

It's important to know and interpret policy language, exclusions and coverages in order to state a valid claim under this insurance

Business interruption insurance is "`designed to do for the business what

the business would have done for itself had no loss occurred."1 Thus, this coverage provides a vehicle to recoup earnings lost as a result of an occurrence of a covered risk that interrupts the insured's business operations.2 The coverage may be purchased as an endorsement to a property insurance policy or as a separate insurance policy. The coverage form typically provides insurance against loss of earnings and also may cover other costs, including payroll, rent, insurance premiums, utility bills and taxes. Business interruption insurance typically requires proof of covered physical loss to specified property, causing actual interruption of business with resulting monetary loss.

SCOPE OF COVERAGE