business interruption insurance

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Business Interruption Insurance

An insurance policy that provides coverage in case some event causes a business to relocate or temporarily close. For example, if an office floods and becomes unusable, business interruption insurance will replace the profits the company would have made during the time it is closed and also will cover its operating expenses. It is also called business income coverage.

business interruption insurance

Insurance that provides benefits if business is interrupted while repairs are conducted after an insurable loss.
References in periodicals archive ?
Business interruption policies typically require a triple trigger: an actual loss of business income, a suspension of operations, and the loss must result from covered, direct physical loss or damage to the premises.
The run-up in commodity prices has caused many risk managers in the utilities sector to turn to business interruption coverage, says Marshall Nadel, managing director of utilities at AON Natural Resources, as business interruption policies allow risk managers to cover the costs of purchasing replacement power in the event of an unplanned power outage.
11 terrorist attacks, yet it remains a big vulnerability for policyholders and the insurers that sell the business interruption policies to cover those losses, according to a software firm consultant.
Most business interruption policies contain language like this: "Due consideration shall be given to the experience of the business before and after the loss in evaluating the lost business income." In many cases, the most direct manifestation of this "due consideration" revolves around projecting the insured's expected revenue had the incident never occurred and accurately and fairly setting the performance standard of the business.
Some business interruption policies include endorsements for loss of utilities, says Larsen.
Companies might try to protect their income by requiring their suppliers or manufacturers to name them as additional insureds on their business interruption policies, but that may not do the trick.
A possible answer: Business interruption policies don't usually cover expediting expenses except to the extent that they reduce the loss.
Standard business interruption policies promise to pay for business income lost when operations are suspended during the period of restoration.
Business interruption policies return no more than was actually lost--"actual" meaning the difference between the probable experience of the business had no loss occurred and the actual earnings during the period of interruption.
Some say if a pool isn't organized, insurers will reconsider their appetite for certain classes of business, such as large office complexes and landmark buildings or business interruption policies. "There is no easy way to price for terrorism.
Munich Re said it expected a hit in the medium hundreds of millions of euros from Sandy, adding that it currently did not look like so-called contingent business interruption policies, for companies not directly hit by the storm, would play a big role.

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