Does BI cover COVID/pandemics?

Usually no — most policies exclude communicable diseases since 2020.

Required for small business?

Not legally required, but essential for any revenue-dependent business.

Civil authority coverage?

Some policies include — if government orders closure for safety.

Yes — payout is taxable income (replaces lost income).

Self-employed eligibility?

Yes — calculate based on net income vs revenue.

Business Interruption Claim

BI claim: Lost net income + continuing operating expenses + extra expenses to mitigate loss. Limited to policy period (usually 12 months).

Avg Monthly Revenue ($)

Net Profit Margin %

Continuing Monthly Expenses ($)

Downtime Duration (months)

Extra Expenses to Recover ($)

Lost Net Profit

—

Continuing Expenses

—

Total Claim

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Monthly revenue	—
Net margin	—
Continuing expenses	—
Downtime duration	—
Extra expenses	—
Net profit lost	—
Continuing expenses	—
Extra recovery costs	—
Total BI claim	—

Business Interruption (BI) insurance pays for lost income, continuing expenses, and recovery costs when a covered peril (fire, vandalism, etc.) shuts down your business. Claim value = lost net profit + continuing operating expenses + extra expenses incurred to minimize loss.

BI Claim Components

(1) Lost net income: revenue - variable costs over downtime period. (2) Continuing fixed expenses: rent, payroll, utilities that continue even when closed. (3) Extra expenses: temporary location, expedited equipment, overtime to recover. All must be CAUSED BY covered peril.

Documentation Required

Pre-loss: 3 years tax returns, profit/loss statements, prior year same-period revenue. During loss: daily log of activities, expenses incurred, photos. Post-recovery: comparison of recovery period to historical. Insurer will challenge — be ready with evidence.

Waiting Period & Limits

Most policies have 72-hour waiting period (no claim for first 3 days). Policy limit = monthly amount × 12 typically. Some policies extend to 24 months for prolonged events. Read 'maximum period of indemnity' clause carefully.

Last updated May 2026. Sources: III Business Interruption.