What type of coverage protects against loss of income when business operations are interrupted by a covered event?

Business interruption insurance is specifically designed to protect a business against the loss of income that occurs when operations are halted due to a covered event, such as a fire or natural disaster. This type of coverage helps to replace lost revenue and cover ongoing expenses, such as rent and utility bills, that a business might still incur even when it is not operational.

Unlike property damage coverage, which focuses on the physical damage to the business property itself, business interruption insurance directly addresses the financial impact of an interruption in operations. General liability insurance provides protection against claims of bodily injury or property damage caused by the business, while workers' compensation insurance covers medical expenses and lost wages for employees injured on the job. Neither of these options addresses lost income due to operational interruptions. Therefore, business interruption insurance is essential for safeguarding a business’s financial stability in such circumstances.