Business Income Insurance (BII), often called Business Interruption Insurance, is a crucial type of coverage that protects a business's income stream when operations are temporarily halted due to direct physical damage from a covered peril.

Essentially, while Commercial Property Insurance pays to repair or replace the physical assets (building, equipment), Business Income Insurance pays for the financial impact of being unable to operate.

How It Works

BII is generally triggered when a covered peril (like fire, windstorm, or theft, as defined in your main property policy) causes physical damage that forces your business to:

1. Temporarily close.

2. Operate at a reduced capacity.

Once the claim is triggered, the policy helps replace the financial losses for a specified "Period of Restoration."

Key Policy Terms to Understand

• Period of Restoration: The time frame during which the insurance will pay for lost income and expenses. It typically starts after a waiting period (e.g., 48-72 hours) and ends when the property is, or reasonably could have been, repaired and operations resume.

• Waiting Period: The amount of time (usually 24, 48, or 72 hours) immediately following the damage before the Business Income coverage payments begin.

• Extended Business Income Coverage: An optional extension that pays for the loss of income after the property is fully repaired and operations have resumed, covering the period needed for the business to rebuild its customer base and return to pre-loss revenue levels.