Do I Need Business Interruption Coverage?

Do you own your own business?

Are you financially prepared for an interruption?

If a disaster or loss suddenly interrupts your business, having business interruption insurance will help to cover the loss of business income.

It’s not a requirement but it may save your business.

Without it, you may have difficulty getting your business up and running again.

What is Business Interruption Insurance?

Business interruption coverage is an additional policy that protects a business from loss of income should the business be interrupted.

Most business interruption insurance covers the following:

  • Profits. This policy will provide reimbursement for lost profits based on the business’ performance from the previous month.
  • Fixed costs. Operating costs and the costs of doing business are covered.
  • Training costs. In the event that machinery needs to be replaced, this policy will cover training fees involved with teaching employees how to use the new equipment.
  • Temporary location. Should your business need to move and operate from a temporary location, most policies will cover the costs involved with moving.
  • Employee wages. In order to retain employees during a business shutdown, this coverage will help you make payroll.
  • Taxes. Even if your business is closed, you are still required to pay taxes. This coverage will ensure that you can pay your taxes without incurring penalties.
  • Loan payments. You are also still required to make loan payments during business closures. Business interruption insurance will help you make those payments.

Business interruption insurance will cover you should an unexpected situation force you to temporarily close your business. Events such as fires and vandalism are covered under this policy.

Do You Need Business Interruption Insurance?

The answer to this question depends entirely upon whether or not you can handle the economical consequences of having your business closed.

Any business, big or small, should consider having this type of insurance.

Sudden losses can spell disaster for your business. In fact, almost 40% of businesses that close due to unexpected circumstances do not recover.

Repairs and replacements take time, so you need to consider if you can survive financially (paying employees, paying bills, paying loans, etc.) until they are complete.

Overall, business interruption coverage will take the stress out of worrying about the health of your business should an unplanned closure occur.

Will Business Interruption Insurance Cover Closures Due to COVID-19?


Covid-19 has taught us the realities of a business being interrupted. You may not worry about physical damage to your business property and equipment, but a pandemic can certainly bring your business to a halt.

However, business interruption coverage typically requires that there is direct physical damage. Many businesses that are facing hardship and financial loss due to the pandemic are looking to their commercial insurance policies to see if coverage can be provided in this situation.

There’s no hard answer to this question, yet the situation is ever-evolving and many policies may extend to cover losses related to COVID-19.

Be sure to check with your insurance provider to see if they offer business insurance policies that cover the following:

  • Event cancellations
  • Interruptions by civil authority
  • Infectious diseases and other non-physical damages

If so, you may be covered should your business experience a shutdown or loss of income due to the Coronavirus.

In these uncertain times, it’s certainly worth looking into.

Protect Your Business

Commercial insurance is all about protecting your business. Why not extend that protection to avoid facing the downfall of your company should you need to temporarily close your doors?

Speak to your insurance broker today to discuss your options when it comes to business interruption insurance.

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