Business interruption insurance reimburses the business for that lost revenue and enables the business to continue when it becomes fully operational again. Businesses can file a claim on their business interruption insurance coverage at the same time they file their claims for property damage covered by the comprehensive policy. If the interruption is not due to a cause covered under the property policy, the claim will likely be denied. Businesses can also deduct their business interruption insurance premiums on their company’s income taxes as ordinary business expenses.
Business owners should be aware of the limits on their business interruption insurance to make sure that the policy limits provide adequate revenue to see the company through an extended shutdown. Policy limits should provide at least two to four weeks of revenue, giving the company adequate time to recover, clean up and rebuild.