Best Business Continuation Insurance Companies


Kiah Treece

- Updated February 21, 2024

Best Business Continuation Insurance Companies

Every day, business owners face a host of risks as part of their normal operations. Some of those risks are small, while others are so serious they cause a business to shut down for some time. Luckily, there’s business continuation insurance—a type of coverage that helps businesses cover their costs while temporarily shut down.

Here’s how business continuation coverage helps protect businesses from some of the most serious risks.

What is Business Continuation Insurance?

Business continuation insurance is a type of business insurance that helps protect companies from financial losses from unexpected circumstances that leave them unable to operate. This type of coverage is designed to help companies remain stable and keep operations running in the event of an unforeseen interruption.

Who Needs Business Continuation Insurance?

Business continuation insurance is helpful for businesses of different sizes and across numerous industries. It provides financial stability and a secure future for covered businesses, as well as business owners and their employees and family members. Companies with multiple owners or partners often benefit the most from business continuation coverage, as it can help protect all of their interests in case of an unexpected event.

What Does Business Continuation Insurance Cover?

Business continuation insurance typically covers some of the costs incurred when a business temporarily closes due to unforeseen circumstances. These costs can include rent or mortgage payments for business facilities, utility payments, employee payroll, costs associated with switching vendors or changing processes, and even lost profits. It may also cover legal fees if the company’s customers, vendors, or employees are affected by the temporary closure.

What Does Business Continuation Insurance Exclude?

Business continuation insurance usually does not cover liabilities resulting from the negligence of an employee, manager, or owner of a business. Likewise, policies do not cover intentional misconduct or companies that are in bankruptcy. Some policies may exclude losses associated with natural disasters and other acts of God, including losses resulting from temporary closure due to COVID.

How Much Does Business Continuation Insurance Cost?

The cost of business continuation coverage varies depending on the location, type, and size of a business, as well as the amount of coverage and any additional benefits. Premiums can range from a few hundred dollars to several thousand per year.

What is the Difference Between Business Continuation Insurance and a Business Owner Policy?

A business owner policy (BOP) is a type of business insurance specifically designed for small businesses. It usually bundles several different types of coverage, including general liability, commercial property insurance, and others.

Business continuation insurance is more specific and typically covers losses resulting from a business’ temporary closure due to a disaster or other unforeseen event. However, business continuation insurance can sometimes be included in a BOP, depending on the amount of coverage, the type of business, and the insurance provider.

What Do You Need to Take Out a Business Continuation Policy?

To get a business continuation insurance policy, you’ll need to provide detailed information about your business. This usually includes the number of employees in the business, the types of risks associated with business operations, annual revenue, and time in business. Additionally, you should include information on any other policies you carry, your claims history, and company financials. Providing comprehensive information about your business and existing coverage helps the insurance company adequately assess its risk.

How much coverage do I need for my business?

The amount of business continuation coverage you need depends on several factors, including the size and nature of the business’ operations, years in operation, and annual revenue. To adequately insure against losses from a temporary closure, assess your risks and liabilities with the help of an agent. Here’s what you should consider when determining how much coverage you need:

  • The size and nature of the business’ operations
  • The amount of coverage necessary for specific needs, such as to cover ongoing fixed costs
  • Risks and liabilities faced by your business
  • The cost of keeping key employees so they don’t seek other employment while you’re closed
  • Costs associated with sudden changes in operations
  • Potential lost profits during a temporary closure

What Are the Most Common Use Cases for Business Continuation Insurance?

The most common use cases for business continuation insurance include covering a business’ ongoing fixed costs—like rent and utilities—in the event of a temporary closure. These policies can also cover costs associated with changing a business’ equipment or processes if the company must adjust operations. It may also protect against financial losses due to decreased productivity, including lost profits.

Some of the most common uses for business continuation insurance include:

  • Maintaining operations during an unforeseen interruption
  • Legal fees in case customers, vendors, or employees have losses as a result of a business interruption
  • Costs associated with replacing any employees that leave during a shutdown
  • Lost profits during a temporary closure
  • Rent or mortgage payments to keep key business facilities
  • Costs for retooling or adjusting businesses equipment or processes to work with a new vendor

Does Business Continuation Insurance Cover COVID?

While business continuation insurance typically covers losses related to an unexpected interruption in business, policies implemented before the outbreak of coronavirus generally did not insure businesses against losses due to the pandemic or resulting economic shutdown. In response, many policies have since been adjusted to include coverage for COVID-related losses. That said, most business continuation policies do not provide specific coverage for pandemics or other diseases.

If you believe your policy should include coverage for COVID-related losses, read your policy carefully and speak with your insurance provider. Additionally, some insurers may offer additional policies or riders that can provide additional coverage in the event of a pandemic.

Can Business Continuation Insurance Be Included in Other Policies?

Business continuation insurance may be included as part of a BOP—a type of insurance specifically designed to bundle several different types of coverage for small businesses. BOPs usually include property, liability, and business interruption insurance in one package, but this can vary by policy.

Business continuation insurance can also be included as part of an umbrella policy. This type of insurance provides additional coverage beyond the limits of other policies. Umbrella policies are typically used to provide excess liability coverage, but they can also provide coverage for business interruption and other losses.

Should I Buy Business Continuation Insurance as Part of a Business Owners Policy?

Business continuation coverage is an important type of coverage for some businesses and can be a valuable addition to any business owner’s policy. A BOP typically includes general liability and property in one package, so adding business continuation protection as part of the policy can give you peace of mind that your business will remain protected even in the event of an unforeseen interruption.

How Do You Handle a Business Continuation Claim?

If your business is facing an unexpected interruption, it’s important to know what steps to take to file a claim for business continuation insurance. Here are a few steps to help you through the process:

  1. Gather information about the incident. Make sure you have as much information as possible about what happened and when. This can streamline the claim process.

  2. Contact the insurance company. Let the company know what happened and ask for instructions on how to file a claim.

  3. Complete the required paperwork. The insurance company will likely send you a packet of paperwork to fill out. Be sure to complete it fully and accurately.

  4. Submit the paperwork and await approval. Once you submit the paperwork, communicate with the insurance company to provide any documentation necessary to approve your claim. This process can take some time, so be patient. While the claim is under review, document all ongoing costs incurred due to the interruption to your business.

  5. Get reimbursed for your losses. Once your claim is approved, you will be reimbursed for any eligible financial losses incurred as a result of the incident.

Business continuation insurance doesn’t fix all of the problems that result from a disaster. However, it can provide peace of mind in the event of an unforeseen interruption. Being prepared and knowing what to do when filing a claim can help you get the coverage you need when it matters most.

Types of Business Continuity Insurance


In most cases, business continuity coverage is included in a business interruption policy. These policies protect a business financially in case it’s forced to close temporarily after a disaster.

Depending on the business, however, owners may also elect to implement additional safeguards that can ensure the continuation of a business if a key owner or manager is unable to work due to death or disability. In those cases, businesses can be protected using one of two different types of agreements:

Cross-Purchase Agreements

A cross-purchase agreement allows two or more business owners to insure each other against disability or death. These owners provide both a buy-sell agreement and life insurance coverage, wherein the life insurance proceeds are used to buy out a partner who dies or is incapacitated.

Entity-Purchase or Redemption Agreements

Entity-purchase agreements are similar to cross-purchase agreements, except that instead of having the remaining partners buy out the partner’s portion of the business, the business itself or a third party is designated to acquire their interest in the event of their death.

How Long Does Business Continuation Insurance Coverage Last?

When you buy a business continuation policy, coverage typically lasts for a specific period of time, usually three to five years. This length of time is determined by the insurer and may vary from one policy to another. In addition to the length of the policy, the length of time that a company is protected after a disaster also varies. While most policies protect against losses for up to a year following the event, coverage varies by provider and policy.

Components of a Business Continuity Plan

A business continuity plan is a document that business owners develop to detail how they will continue to operate if something unexpected happens. The plan includes things like what to do if the business loses power or Internet access, how to keep track of employees and important documents, and what to do if there is a natural disaster.

Businesses in some industries are required to prepare business continuity plans to ensure their customers will still receive service in the event of a terror attack or natural disaster.

A Buy-Sell Agreement

A buy-sell agreement outlines what will happen to the ownership of a business if one or more owners are unable to continue operating the company. These agreements can spell out which partner or partners are responsible for acquiring the interests of others in the event of their death or disability.

Key Person Life Insurance

Key person insurance is a type of life insurance that provides coverage if a key employee passes away, ensuring that the business will not suffer financial losses due to their absence. The amount and type of coverage depend on the individual needs of each business, with companies usually choosing policies that cover up to two times their annual salary or other compensation packages.

Key person life insurance can be included as part of a BOP or an umbrella policy, providing additional protection above what other policies offer.

Resource Planning for Recovery Strategies

Recovering from an unexpected interruption requires more than just financial resources. Businesses must also have the personnel, tools and technology necessary to restore operations quickly. This includes having backups of all important data, having access to skilled labor and having the right equipment on hand to get operations back up and running. Planning ahead for these contingencies is essential in order to ensure that your business is able to resume normal operations with minimal disruption.

Business Continuity Impact Analysis

Business continuity plans should include a thorough assessment of the potential risks and their impacts. This process, known as a Business Continuity Impact Analysis (BCIA), helps identify which areas of the business are most vulnerable and how each disruption could affect the operations of each. The BCIA is an essential part of any plan to ensure that all contingencies have been taken into account in order to minimize financial losses and disruption to operations.

Manual Workarounds

No matter how comprehensive a business continuity plan is, there will be times when manual workarounds are needed to keep operations running. Having a team of knowledgeable staff and having access to the right tools and technology can help minimize disruption in the event of an unexpected interruption. It’s important to include these contingencies as part of your plan to ensure you can quickly restore operations with minimal impact on your bottom line.

Testing and Training

A business continuity plan may also include sections indicating which employees or departments may need to be cross-trained to fill operational gaps while a business gets up and running.

Additionally, the plan should include guidance for training employees on the plan itself and periodically testing it to ensure it works in various unforeseen circumstances. Regular testing and training ensure that everyone is prepared and familiar with the plan. This can minimize disruption and ensure your business can continue running smoothly in the event of an unexpected interruption.

Benefits of Business Continuation Insurance

Business continuation insurance is an important part of any comprehensive risk management plan. It provides the financial resources necessary to keep operations running in the event of a disruption, helping to minimize losses and disruptions caused by unexpected interruptions. In addition, it helps protect companies from potential legal liabilities and other unforeseen costs associated with business continuity planning.

Below are some of the specific benefits of business continuation coverage:

Reduce Business Losses After an Interruption

Business continuation helps business owners minimize losses resulting from an interruption in their operations. This lets businesses stay afloat during difficult times, protecting the livelihoods of company owners, managers, and employees.

Help Restoring a Business to Full Operations

Business continuation insurance also helps cover the costs associated with restoring operations after an interruption. This includes lost income, extra expenses incurred due to the disruption, and the additional time required to get back up and running.

By taking the steps necessary to create a comprehensive business continuity plan, businesses can mitigate their risks, reduce financial losses and ensure that they are prepared for any unexpected disruptions. The right policies, coupled with proper planning, will help minimize disruption, so businesses can continue operating smoothly through difficult times.

Additional Business Income Coverage Options

In addition to business continuity insurance, there are other ways for business owners to insure their business income against losses. Here are a few:

Contingent Business Interruption Coverage

Contingent interruption coverage extends the protection of your business interruption insurance by covering situations where a supply chain or customer disruption causes losses to your business, even if you don’t experience any direct damage from the event itself. With this type of coverage, businesses can ensure that their operations remain running even in the face of unexpected risks outside the four walls of your business.

Extra Expense Coverage

Extra expense coverage insures businesses against additional costs associated with restoring operations after a disruption. This includes overtime wages, retooling, rental of temporary facilities, or other additional expenses incurred due to the interruption. Extra expense coverage helps ensure that businesses are able to quickly restore operations and minimize potential losses.

Extended Business Income Coverage

Extended business income insurance is another option that can be added to your business interruption insurance policy. This coverage will help cover lost income beyond the restoration period, helping to ensure that businesses are not left with a financial shortfall long after an interruption.

Civil Authority Coverage

Civil Authority coverage is an important option for businesses that need to remain open during times of civil unrest, pandemics, or other disruptions caused directly by government actions. This coverage helps to cover any losses incurred due to mandated closures or restrictions imposed by a government or agency due to no fault of the business or its owners.

Utility Services Coverage

Utility service interruption insurance can help cover losses associated with power outages, gas or water supply disruptions or other utility-related interruptions. This coverage can also provide peace of mind for businesses as it helps protect against unplanned and unexpected losses due specifically to utility service interruptions.

Frequently Asked Questions

What are the Most Common Types of Insurance Small Businesses Need?

Some of the most common types of small business insurance include general liability, professional liability, commercial property, commercial auto, workers' compensation, and employment practices liability insurance (EPLI). Additionally, business interruption (or business continuation) insurance can help protect business owners in the event of an interruption in their operations.

What’s the Most Important Type of Small Business Insurance?

The most important type of small business insurance is general liability, as it protects a business in its interactions with the public. If a customer or other person gets hurt due in the course of dealing with a business—by slipping and falling in a store, for example—general liability protects the business against any losses that person incurs.

Does Business Continuation Insurance Cover Payroll?

In many cases, business continuation insurance covers employers’ payroll expenses during an interruption in their normal operations.

About The Author

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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