What type of coverage protects against lost income due to a business interruption?

Business Interruption Insurance is designed specifically to cover lost income that a business suffers after a disaster such as a fire or flood that interrupts its operations. This type of coverage helps businesses maintain financial stability during the time they cannot operate, providing funds to cover ongoing expenses like rent, salaries, and other obligations despite the loss of revenue. It essentially compensates for the profits that would have been earned had the interruption not occurred.

General Liability Insurance primarily protects businesses from claims of bodily injury or property damage made by third parties, so it doesn’t directly address income loss from operational interruptions. Property Damage Insurance covers costs associated with damage to the physical property, but it does not account for lost income resulting from the inability to use that property. Professional Liability Insurance, on the other hand, protects against claims of negligence or mistakes made in professional services, which is unrelated to business income loss due to disruption. Thus, Business Interruption Insurance is the most relevant type of coverage for protecting against lost income during times when a business’s operations are halted.