Its intent is to provide the insured with a source of recovery for actual loss of business income when operations are interrupted as a result of a covered cause of loss. For an insured whose operations are suspended for a period of time, it can mean the difference between survival and extinction. Business income coverage has taken different forms over the years. It has been referred to as time element insurance, at one time taking the name of business interruption coverage, and currently goes by the name of business income insurance under the commercial property forms.
Coverage is available for loss of income and extra expense, or loss of income without extra expense.
Similar coverage, for loss of income, is also available under the Business Owners Policy. The primary focus of this article will be on the ISO Business Income Coverage Form including extra expense. Historically, coverage was provided for the insured's reduction in gross earnings less any expenses which were not continuing. There did not have to be an actual loss of profit for an insured to recover. As long as the business would have generated earnings which would have covered its operating expenses, but for the operations being suspended, recovery was possible.