Business Interruption coverage is typically an add-on to an existing business insurance policy. In the event of loss or damage to a business or damage to a neighbouring property requiring the business to shut down, business interruption insurance covers continuing expenses or replaces lost profits.
Business Interruption policies require proof that the insured premises sustained physical damage from an insured peril that was covered under their business insurance policy. Once that damage is established, the business interruption coverage is triggered for loss of business income. A business that is interrupted due to the pandemic may not have sustained any physical damage.
There are three types of Business Interruption policies:
A business that is interrupted due to closure due to the pandemic may not have sustained any physical damage. Without physical damage to the insured premises the BI coverage is not triggered.
All businesses are encouraged to talk to their insurance representative if they are unsure whether the business interruption coverage was triggered.