What type of insurance would cover business losses during a period of interruption?

Business Interruption Insurance specifically protects businesses from loss of income due to interruptions in their operations. This type of insurance comes into play when a business experiences setbacks such as natural disasters, fire, or other events that cause physical damage and lead to a temporary shutdown. It compensates for lost revenue during the time it takes to recover and restore the business to its normal operational state.

Unlike Property Insurance, which covers damage to physical assets or property, Business Interruption Insurance focuses on the financial losses that arise from being unable to conduct business activities as usual. Similarly, Liability Insurance pertains to claims against a business for injury or damage caused to other parties, which does not relate to income loss from operational halts. Workers' Compensation Insurance provides benefits to employees who are injured on the job; it does not cover the financial impacts on the business itself during interruptions. Thus, the focus of Business Interruption Insurance is vital for ensuring that business owners can navigate through challenging periods while maintaining financial stability.