Is business interruption the same as business income?
Business income is closely related to business interruption insurance and the terms are sometimes used interchangeably.
Basically, business interruption insurance coverage aims to replace your business income during the period of interruption. Think of it as “making your business whole again.”
Business income refers to the net income the business would have earned had the business not been closed and remained operable, and also considers normal operating expenses that continued despite the suspension of operations.
Business income coverage applies to losses that occurred during the time required to repair the losses or damages, and can be extended to apply to cover expenses for a reasonable amount of time beyond the specified period of suspended operations. Usually the coverage lasts throughout the “period of restoration,” which is the time period reasonably required to restore the business to its previous state before the damages occurred.
Business income is sometimes used by insurers to describe their business interruption coverage. Business income insurance coverage is often subject to either a waiting period or a monetary deductible.