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Best Business Interruption Insurance Companies

Kiah Treece - Updated November 16, 2022
Business Insurance
Best Business Interruption Insurance Companies

Business interruption insurance is coverage that protects a business from losses if it is forced to stop operating due to certain events. The best business interruption insurance offers coverage to guard your business against the greatest number of circumstances.

What Is Business Interruption Insurance?

Business interruption insurance is a type of coverage that can protect your business from financial losses if your business is forced to close or scale back operations due to a covered event. This type of insurance can help cover lost income, pay for extra expenses incurred due to the interruption, and provide additional financial support.

Who Needs Business Interruption Insurance?

Any business that could suffer financial losses as a result of an interruption in operations should consider purchasing business interruption insurance. This type of coverage is particularly important for businesses that rely heavily on foot traffic or have high overhead costs. It can provide much-needed financial assistance if your business is forced to close or scale back operations.

For example, a retail store that must close following a fire may suffer significant financial losses because it cannot generate income during the closure. Businesses with high overhead costs, such as restaurants, may also find business interruption insurance beneficial because it can cover fixed expenses — even when the business is not generating income.

What Does Business Interruption Insurance Cover?

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There are many different events that can be covered by business interruption insurance, including natural disasters, fires, power outages, and even theft. Coverage helps businesses pay for the extra expenses incurred as a result of the interruption. For example, if you're forced to relocate your business due to a fire, your policy may help cover the cost of moving and setting up shop in a new location.

Business interruption insurance can cover a variety of different types of losses, including lost income, extra expenses, and more. Some policies may also offer additional coverage, such as coverage for inventory or accounts receivable. As with other types of insurance, this type of coverage has its limits, and the specific coverage varies depending on the policy.

Always read your policy carefully to understand what is and isn't covered, so you are prepared in the event of an interruption.

What Does Business Interruption Insurance Exclude?

There are certain things that business interruption insurance doesn't cover. For example, losses related to specific events, such as floods, hurricanes, or wildfires. To insure against losses related to those types of events, you'll need specific policies that cover those types of losses and are priced according to your risk.

Additionally, business interruption insurance generally does not cover physical damage to your property or losses if someone gets hurt at your business and you are found liable. If your business suffers damage as a result of a covered event, you'll need to file a claim with your property insurance policy.

When you buy business interruption insurance or any other type of coverage, read your policy documents carefully to understand what is and isn't covered. This way, you can be prepared for an interruption and know what you'll need to cover out of pocket.

How Much Does Business Interruption Insurance Cost?

The cost of business interruption insurance varies depending on various factors, including the size of your business, your industry, and your policy limits. Most companies can expect to pay between $500 and $2,500 per year for this type of coverage. Costs can be much higher for larger businesses or those with higher potential losses.

For small businesses, the cost of business interruption insurance is typically a relatively small percentage of their overall insurance budget. However, this coverage may represent a more significant expense for businesses with higher overhead costs or those more likely to experience interruptions.

What Is the Difference Between Business Continuation Insurance and Business Interruption Insurance?

Business interruption insurance and business continuation insurance are two types of coverage that are often confused. However, there is a key difference between the two types of coverage.

Business interruption insurance covers the loss of income that your business suffers due to an interruption in operations. On the other hand, business continuation insurance helps cover the expenses that your business incurs as it tries to resume operations after an interruption.

If, for example, your business closes due to a fire, business interruption insurance covers the loss of income during the closure. Business continuation insurance helps pay for rebuilding or relocating your business so that you can resume operations.

Both types of coverage can benefit businesses, but they serve different purposes. Read over your policy carefully to understand your coverage.

What Do You Need To Take Out a Business Interruption Policy?

To take out a business interruption policy, you'll need to provide basic information about your business, including its size, industry, and revenue. Also specify the amount of coverage you want and choose a policy limit. Working with an experienced insurance agent can help you get the right coverage for your business. They'll help you understand your options and find a policy that meets your needs.

How Much Coverage Do I Need for My Business?

The coverage you need depends on several factors, including your location, the size of your business, industry, policy limits, and more. However, most small businesses can expect to pay between $500 and $2,500 per year for business interruption coverage.

For most small businesses — especially those with lower risks — the cost of business interruption insurance is typically a relatively small percentage of their overall insurance budget. However, the cost of this coverage can be a significant expense for businesses that are more likely to experience interruptions or have higher overhead costs. In this case, premiums may total thousands of dollars per year.

What Are the Most Common Causes of Business Interruption?

There are a variety of events that can cause a business interruption, but some of the most common include natural disasters, fires, and power outages. Other common causes of business interruptions include theft, vandalism, and equipment failures.

No matter the cause of your interruption, it's essential to have the right coverage in place to minimize the financial impact on your business. Be sure to work with an experienced insurance agent to find the right policy for your needs.

Can Business Interruption Insurance Be Included in Other Policies?

A business owner’s policy (BOP) is a type of insurance that combines several different types of coverage, including property damage, liability, and business interruption insurance. If you have a BOP, review your policy carefully to understand what types of coverage it includes. You may need to purchase additional coverage to protect your business fully.

How Do You Handle a Business Interruption Claim?

If your business is interrupted by an insured event, file a claim with your insurance company. To do so, gather documentation of the interruption and its financial impact on your business. This may include income statements, tax returns, bank records, and other relevant financial documents.

Once you file your claim, an insurance adjuster will review it and determine your eligibility for benefits. If your claim is approved, you'll receive a payment that your business can use to help cover the cost of resuming operations.

Filing a business interruption claim can be complex, but working with an experienced insurance agent can simplify it. An agent can help you understand your policy, gather the necessary documentation, and file your claim.

How Long Does Business Interruption Insurance Coverage Last?

Most business interruption policies will provide coverage for 12 months following the event that caused the interruption. However, some policies may provide coverage for a longer or shorter period.

When you buy coverage, read your policy carefully to understand how long your coverage lasts. This will help you plan for the financial impact of the interruption and make sure that you have the necessary coverage.

Should I Buy Business Interruption Insurance as Part of a Business Owner’s Policy?

If you’re a small business buying several types of coverage, it may make sense to package several policy types together as a business owner’s policy. BOPs often include general liability insurance and commercial property coverage but may also include additional coverages depending on the unique needs of a business. If you want business interruption coverage as part of a BOP, check with an agent to see whether your business is eligible for this combined coverage.

Does Business Interruption Insurance Cover Covid?

Business interruption insurance can provide coverage for a variety of events, including natural disasters, fires, and power outages. However, this type of policy does not typically cover unforeseeable circumstances such as the Covid-19 pandemic.

If you’re concerned about the financial impact of a pandemic on your business, consider purchasing a separate policy that explicitly covers pandemics. You can also talk to your insurance agent about other ways to protect your business, such as adding a rider to your existing policy.

Benefits of Business Interruption Insurance

Business interruption insurance can help protect your business from the financial impact of a disruption. These are some of the main benefits of business interruption insurance:

Reducing business losses after an interruption

Business interruption insurance can help you minimize the financial impact of an interruption by providing coverage for lost income and expenses. This type of coverage can be essential for small businesses that may not have the resources to weather a prolonged interruption.

Business interruption and restoration period

Most policies provide coverage for a period of 12 months following the event that caused the interruption. This can give you the time needed to get your business back up and running.

Protect Your Entire Supply Chain

If your business relies on suppliers, consider purchasing business interruption insurance that covers supplier disruptions. Having adequate coverage can help protect your business from the financial impact of a supplier's interruption and deliver products to your customers on time.

Covering Breaks in the Logistics Chain

If your business ships products, you may want to purchase business interruption insurance that covers breaks in the logistics chain. This coverage can help protect your business from the financial impact of a delayed or disrupted shipment.

Additional Business Income Coverage Options

Contingent Business Interruption Coverage

Contingent business interruption coverage can protect your business if a supplier or customer is interrupted. This type of coverage can help you protect your business from the financial impact of an interruption that is out of your control and may not impact your business directly.

Extra Expense Coverage

Extra expense coverage can help you cover necessary expenses that exceed your normal operating costs. This type of coverage can be vital for businesses that must take additional steps to resume operations after an interruption or resort to higher-cost options due to difficult circumstances.

Extended Business Income Coverage

Extended business income coverage can provide protection for a longer period of time than standard business interruption insurance. This type of coverage can be essential for businesses that may take longer than a year to recover from an interruption.

Civil Authority Coverage

Civil authority coverage can help you cover the cost of lost income and expenses if a governmental order forces your business to close. This type of coverage can be vital for companies located in areas susceptible to natural disasters or other emergencies.

Utility Services Coverage

Utility services coverage can help you cover the cost of lost income and expenses if your business is interrupted by a utility outage. This type of coverage can be essential for businesses that rely heavily on utilities, such as power or water — such as restaurants or bakeries.

What to Look for When Comparing Business Income Insurance Providers

Comparing business income insurance providers can help you find the right coverage for your business. Keep these factors in mind when you're comparing policies to make sure that you're getting the protection you need.

Policy Options & Limits

When comparing business income insurance providers, look at each company's policy options and limits. Ensure that the provider you choose offers the coverage you need to protect your business.

Claim Reporting

When considering different insurance companies, look at how each company handles claims. Check to see that the provider you choose has a process in place that is easy to follow and that you’re comfortable with it.

Cost & Premiums

Be sure to compare the costs and premiums of each business income insurance provider to make sure that you’re getting the coverage you need at a price you can afford.

Financial Strength

It’s important that the business interruption insurance provider you choose is financially sound. Look at the company’s financial stability and ratings to ensure it's able to pay claims.

Customer Service

Make sure that you’re comfortable with the customer service of each business income insurance provider. You’ll want to choose a company that is easy to work with and that you feel confident will be responsive if something goes wrong.

Company Reputation

It’s important to research the reputation of each business income insurance provider. The company you choose should be reputable and have a good track record — especially for the type(s) of coverage you’re buying.

Frequently Asked Questions


Who is best for business insurance?

The best business insurance provider for your company depends on several factors, including your location, industry, size, and level of risk.

What do the top business interruption insurance policies in the US cover?

Business interruption insurance policies in the US typically cover lost income and expenses related to business interruptions. This type of coverage can be vital for businesses that must take extra steps to resume operations after an interruption.

Do most businesses have business interruption insurance?

Business interruption insurance is not required for most businesses. However, it can be a vital part of your risk management strategy. Make sure to talk to your insurance agent about whether or not business interruption insurance is right for your company.

Kiah Treece

Kiah Treece

Licensed Attorney and Small Business Owner

Kiah Treece is a small business owner and former attorney with extensive experience in real estate investing and finance. She's passionate about helping readers navigate personal finance topics like banking, credit cards, personal loans, and insurance. Kiah has been featured in industry-leading publications, including Forbes Advisor, Investopedia, and The Spruce.

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