Definition of Business Interruption Insurance



Business interruption insurance is the insurance coverage against the lost revenues resulting from unforeseen events like natural disasters. No insurance business can predetermine the amount of financial loss that can happen as a result of a natural disaster that is why it is always brought up as an additional feature as an add-on.

 


Business interruption insurance can cover the amount of revenues that are estimated on prorate basis assuming the same revenue stream would have earned had the unseen event had not happened. Similarly, the fixed costs like rents, salaries, even mortgage payments are covered.


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