Which type of insurance covers loss of income due to a business interruption?

Business interruption insurance is specifically designed to cover the loss of income that a business suffers due to a temporary shutdown or disruption in its operations. This insurance helps replace lost income during the period in which the business is unable to operate normally, which may be caused by events such as natural disasters, fire, theft, or other unforeseen incidents that disrupt normal business activities.

This type of coverage is crucial for businesses as it not only mitigates the financial impact of lost revenue but also enables them to maintain ongoing expenses like payroll and rent while they recover from the incident. Unlike general liability insurance, which protects against claims resulting from injuries and damages to others, or property insurance, which covers damage to physical assets, business interruption insurance specifically targets the financial losses resulting from the inability to conduct business. Workers' compensation insurance, on the other hand, primarily covers medical expenses and lost wages for employees who are injured on the job, and does not address loss of income for the business itself.