Glossary

Ordinary payroll

In a business income policy, rank-and-file wages and related costs that coverage can keep paying during a shutdown, often for a limited number of days.

Also called: ordinary payroll expenses, ordinary payroll limitation, payroll coverage in business income

Property

Ordinary payroll is a defined category in the ISO business income form, CP 00 30. The form defines ordinary payroll expenses as payroll expenses for all employees except officers, executives, department managers, employees under contract and any others the declarations list. It includes payroll, employee benefits if directly related to payroll, FICA payments you pay, union dues you pay, and workers' compensation premiums.

It matters because payroll is usually the largest continuing expense after a loss. Business income coverage pays net income plus continuing normal operating expenses, and ordinary payroll is part of that. Insurers commonly let you exclude ordinary payroll, or limit it to a stated number of days, in exchange for a lower premium. A limit of 60 or 90 days looks harmless until the rebuild takes longer; the policy stops paying those wages when the count runs out, even though the business is still closed.

Say a restaurant (a hypothetical) elects a 90-day ordinary payroll limitation and a fire keeps it closed for six months. The insurer pays kitchen and wait staff wages for 90 days; the other 90 are unprotected unless the owner pays out of pocket or lays people off. Excluding payroll also changes the coinsurance base, so the worksheet must match the election. Work through your own figures with the guide on how to calculate a business income limit and the business income (interruption) limit calculator.

Last reviewed October 10, 2026

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Related terms

Business income Property coverage that replaces net income and continuing operating expenses, including payroll, while a covered physical loss suspends operations. 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. Extra expense Property coverage for the added costs of staying open after a covered loss, such as a temporary location, rented equipment or overtime. Business overhead expense Disability insurance that reimburses a disabled owner's fixed business costs, such as rent, utilities and staff salaries, while they cannot work. Coinsurance A property policy condition requiring you to insure to a set percentage of value, or share the loss. (Health plans use the word for a cost share.)

Related guides

Documenting a business interruption claim, from day one to final payment How to prove a business income and extra expense loss under ISO form CP 00 30: the records insurers ask for, how the loss is measured and where claims stall. Business interruption insurance: how business income coverage works What business income coverage pays after a covered physical loss, how the 72-hour wait, period of restoration and extended income work, and where the gaps are. How to calculate a business income limit A step-by-step method for setting a business income limit: the coinsurance base, how long you would be down, and the options that fit the limit to your risk. How workers' comp premiums are calculated Payroll, class code rates, the experience mod, schedule credits, premium discount and the audit explained step by step, with a hypothetical worked example. Pay-as-you-go workers' comp: how it works and who it suits Pay-as-you-go workers' comp bills premium from each payroll run, not a big deposit. How the payroll link works, what it does to audits and where it falls short.

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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.

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Cómo se calcula la prima de compensación laboral Nómina, tasas por código de clase, factor de experiencia, créditos, descuento de prima y auditoría, paso a paso y con un ejemplo hipotético resuelto. 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.