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🏭 '''Business interruption''' is a category of [[Definition:Property insurance | property insurance]] coverage that indemnifies a [[Definition:Policyholder | policyholder]] for income lost and continuing expenses incurred when a covered peril — such as fire, windstorm, or equipment breakdown — forces a temporary halt or reduction in operations. Unlike standard property coverage, which pays to repair or replace physical assets, business interruption responds to the economic consequences of that physical damage, bridging the gap between a [[Definition:Loss | loss]] event and the resumption of normal revenue.

📝 Coverage typically activates after a waiting period (often 72 hours) and continues for a defined [[Definition:Period of restoration | period of restoration]] — the time reasonably required to rebuild, repair, or relocate. The [[Definition:Insurer | insurer]] calculates the payout based on the insured's projected net income, ongoing fixed costs such as rent and payroll, and any extra expenses needed to expedite recovery. [[Definition:Underwriter | Underwriters]] evaluate historical financial statements, revenue trends, and the nature of the business to set appropriate [[Definition:Coverage limit | limits]] and [[Definition:Coinsurance | coinsurance]] requirements. Extensions such as [[Definition:Contingent business interruption | contingent business interruption]] — which covers losses caused by damage at a key supplier or customer — broaden protection across the insured's [[Definition:Supply chain | supply chain]].

⚡ Few coverage disputes in recent memory have drawn as much attention as business interruption [[Definition:Claim | claims]] during the COVID-19 pandemic, when thousands of businesses sought recovery for government-mandated shutdowns. Most policies required direct physical damage to trigger coverage, and courts largely upheld insurers' positions, but the episode sparked legislative proposals, new [[Definition:Policy exclusion | exclusion]] language, and a broader industry conversation about [[Definition:Pandemic risk | pandemic risk]]. The experience underscored that business interruption is one of the most financially significant — and most litigation-prone — components of a commercial [[Definition:Insurance policy | insurance program]], demanding precise policy language and rigorous [[Definition:Underwriting | underwriting]] discipline.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Contingent business interruption]]
* [[Definition:Property insurance]]
* [[Definition:Period of restoration]]
* [[Definition:Extra expense coverage]]
* [[Definition:Civil authority coverage]]
* [[Definition:Business continuity]]
{{Div col end}}

Definition:Business interruption - Revision history

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