Property Coverage

Business Income

Business income coverage protects your company against a loss of income caused by a shutdown in your business operations as a result of a physical loss. This coverage is sometimes called Business Interruption Insurance. It may be written alone or in combination with extra expense coverage.

What is Business Income?

Within the context of property insurance business income includes both of the following:

• Net Income The net income you would have earned if no loss had occurred. Net income is your net profit or loss before income taxes are subtracted.
• Continuing Expenses The normal operating expenses you must continue to pay after a loss. Examples are rent, electricity and property taxes.

What Are the Requirements for Coverage?

A business income loss is covered only if all of the following conditions are satisfied:

• Income Loss: You suffer an income loss due to a necessary suspension of your business operations.
• Physical Loss: The suspension results from physical damage by a covered peril to property at premises described in the declarations. Covered perils are often described in a section of your policy called Causes of Loss.
• Scheduled Limit: A business income limit must be scheduled for the premises where the physical loss takes place.
• Period of Restoration: The suspension must occur during a time period called the Period of Restoration. This is essentially a deductible called “waiting period”. Most policies are 72 hours, but there are some that are less.

Property Coverage Extras

Besides just the contents coverage, you may want to consider some of the following coverages that are often not covered under your standard policy. Almost every carrier can add this per “property extension endorsement” for a reasonable amount.

• Money & Securities Coverage
• Accounts Receivable
• Outdoor Signs
• Employee Theft
• Back up of Sewers or Drain
• Personal Property of Others
• Fine Arts
• Outdoor Property
• Lock Replacement