Which statement does NOT correctly describe Business Interruption Insurance?

Business Interruption Insurance is a type of insurance that provides coverage for the loss of income a business may experience after a covered event disrupts its operations. Understanding the characteristics of this insurance is key to recognizing the correct statement among the options provided.

The statement that Business Interruption Insurance insures the majority of perils covered by the Property Policy is not accurate. While Business Interruption Insurance is typically tied to the coverage provided by a Property Policy, it does not inherently cover all the same perils. Instead, it usually focuses on specific risks that lead to an interruption in business operations rather than covering the physical damage itself. The underlying Property Policy must respond first to cover any physical damage due to covered perils such as fire, theft, or natural disasters before the Business Interruption Insurance provides coverage for the resulting income loss.

The other statements accurately describe important aspects of Business Interruption Insurance. It is indeed a contract of indemnity, emphasizing the concept of restoring the insured to the financial position they would have been in had the loss not occurred. Coverage is limited to the policy period, meaning it only pays for income loss during the specified coverage term, which is important for businesses to understand. Finally, the insurance does pay for expenses that help to reduce the overall