Glossary

Business income

Property coverage that replaces net income and continuing operating expenses, including payroll, while a covered physical loss suspends operations.

Also called: business interruption, BI, business interruption insurance, business income coverage

Business income coverage, also called business interruption, pays what a business loses when a covered physical loss shuts it down or slows it. In the ISO CP 00 30 form, business income is the net income (net profit or loss before income taxes) that would have been earned, plus continuing normal operating expenses, including payroll. It runs through the period of restoration, after a 72-hour waiting period, and the form adds extended business income to cover the ramp-up after you reopen.

Say a bakery earns $20,000 a month in net income and carries $50,000 a month in rent, payroll, loan payments and utilities that continue. A three-month closure after a fire produces roughly $210,000 of covered loss, minus the waiting period. A limit chosen from last year's profit alone would fall far short of that.

The trigger is direct physical loss or damage at the described premises from a covered cause of loss. A shutdown without physical damage, such as an order closing your street or a supplier's fire, needs civil authority or contingent business income coverage. Coinsurance, if shown in the declarations, is tested against a 12-month figure of net income plus operating expenses. extra expense covers the added cost of staying open. The guide on business interruption insurance: how business income coverage works explains the form, and the business income (interruption) limit calculator estimates a limit.

Last reviewed October 10, 2026

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Related terms

Extra expense Property coverage for the added costs of staying open after a covered loss, such as a temporary location, rented equipment or overtime. Period of restoration In a business income policy, the time for which lost income is covered, from a waiting period after damage until repairs should be done or operations resume. Actual loss sustained A way of paying business income claims with no dollar limit: the insurer reimburses documented lost income and expenses for a stated period. Civil authority Business income coverage for a shutdown when a government order blocks access to your premises because of damage to nearby property. Contingent business income Coverage for income lost when physical damage at a supplier, customer or other business you rely on, not your own premises, slows or stops your operations.

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Related insurers

FM Policyholder-owned property insurer (formerly FM Global) for large and midsize companies, known for engineering-led loss prevention and member credits.

Related industries

Bakery insurance Insurance for retail and wholesale bakeries: GL and product liability for allergens, oven and mixer breakdown, spoilage, delivery vehicles and workers' comp. Brewery, winery and distillery insurance Insurance for craft breweries, wineries and distilleries: product liability and recall, taproom liquor liability, stock and spoilage, fire, and federal bonds. Coffee shop insurance What coffee shops and cafes need: GL with hot-beverage claims, property and equipment breakdown, spoilage, comp, and roasting or wholesale add-ons. Convenience store and gas station insurance Robbery, fuel and tank pollution, alcohol and tobacco sales, spoilage and late hours drive convenience store and gas station insurance. Hotel and motel insurance Insurance for hotels, motels and inns: property and business income, guest liability, innkeepers coverage, comp, liquor, cyber and franchise requirements. Landlord insurance What landlords need: a DP-3 or commercial property policy, liability, loss of rents, and an answer on habitability and fair housing claims.

Related tools

Business income (interruption) limit calculator Estimate the business income limit you need after a covered loss, including extended recovery and extra expense, then test it against your coinsurance clause.

Related en español

¿Qué es una póliza para dueños de negocio (BOP)? Una BOP combina propiedad, ingresos del negocio y responsabilidad civil general para negocios pequeños de bajo riesgo. Qué incluye, qué deja fuera y su precio. Seguro de interrupción de negocios: cómo funciona la cobertura de ingresos Qué paga la cobertura de ingresos del negocio tras una pérdida física cubierta: la espera de 72 horas, el periodo de restauración, la extensión y los huecos.