What does "business interruption insurance" cover?

Business interruption insurance specifically covers lost income resulting from a disruption in business operations. This kind of insurance is crucial for businesses that may face interruptions due to various circumstances, such as fires, floods, or other disasters that can halt normal operations.

When a business cannot operate as usual, it can result in significant financial losses due to the inability to make sales or provide services, which is precisely what this insurance is designed to mitigate. The coverage not only compensates for lost revenue during the interruption period but can also cover ongoing expenses such as rent and payroll, ensuring that the business can recover and resume operations successfully after the event causing the disruption.

While other options seem relevant, they do not align with the primary function of business interruption insurance. For instance, lost income due to natural disasters is indeed covered but is more of a specific scenario rather than the overall purpose of the insurance. Coverage for equipment failures relates to property insurance or specific equipment coverage, while liability for personal injuries instead pertains to liability insurance, which protects against claims arising from injuries to third parties on business premises.