The short answer
Business interruption insurance replaces income and certain ongoing expenses when a covered loss forces you to slow down or stop. It generally responds only when physical damage from an insured cause is behind the shutdown, and it pays for a defined period after a waiting period. A licensed broker sets the figures from your financial records and explains what triggers it.
- Owners whose revenue stops or drops when the premises are unusable
- Businesses that depend on one supplier, one customer or one building
- Restaurants, retailers and clinics with fixed rent, wages and loan payments
- Owners who already have property insurance and want to know what it leaves out
- Anyone planning a renovation or move that could interrupt trading
3 licensed brokers in the network handle this. In Alberta, Canada, a request for business interruption insurance can be offered to up to three of them, chosen because they are licensed for this line and place. They are test brokers while we are in demo.
See the brokers → Outside Alberta, Canada you can prepare and save a request today; sending opens place by place. Brokers answer with their own quotes. Broker.insure does not quote, advise or take commission.
01 / What it covers
The parts worth understanding
Lost net income
The profit you would have earned during the shutdown, based on past results and expected trading. It is the core of the cover.
Continuing expenses
Costs that do not stop while you are closed, such as rent, loan payments, insurance and payroll you decide to keep paying. Whether payroll is included depends on the form.
Extra expense
Costs of keeping going in another way, such as temporary premises, rented equipment or express shipping. It is meant to reduce the time and cost of the interruption.
Waiting period
A set time at the start of a loss before the policy begins to pay. Longer waiting periods may be offered and change what is received early on.
Indemnity period
The maximum length of time the policy will pay after the damage. A business that takes a long time to rebuild its customer base may need more than the time to repair the building.
Dependent and supplier cover
Optional protection when damage to a key supplier, customer or utility, rather than your own premises, stops your trade. Worth asking about if one party is critical to you.
02 / Get ready
Bring this, and expect these questions
Gather
- Financial statements or tax filings for the most recent complete years
- Monthly revenue showing busy and slow periods
- Fixed costs that continue when you are closed, with amounts and due dates
- Payroll details, including which staff you would keep paying
- The longest realistic time to repair or rebuild, including permits and equipment lead times
- Names of critical suppliers and customers and how replaceable they are
- Whether you could operate from another location, and what that would involve
- Your existing property policy, to see how it links to this cover
A broker will ask
- What was your net income and what are your continuing expenses in a typical month?
- How long would it take to be fully operating again after a total loss, including permits and equipment?
- Is your business seasonal, so that a closure at the wrong time costs more?
- Which supplier or customer would stop you if they were unable to operate?
- Do you rely on power, internet or a single piece of equipment to operate?
- Could you move to temporary premises, and what would that cost?
- Do you want payroll to be covered through a closure?
- Have you thought about what you will need to prove after a loss and how you will keep your records?
Not sure of an answer? Leave it. "Not known yet" is a fine answer, and a broker will help you fill it in.
03 / Build your request
Answer a few questions. Get your own list.
Pick what fits. Your answers shape the list beside them, and they are saved to your request as plain facts a broker can read. "Not sure yet" is always a fine answer.
04 / Three situations
See which one sounds like yours
A restaurant after a kitchen fire
A fire starts in the exhaust system and the dining room is closed for months while the kitchen is rebuilt. Rent and loan payments continue and the owner would like to keep the cooks on the payroll.
First steps. Before any loss, ask the broker whether payroll is included, how the waiting period works and what the indemnity period is based on. Keep monthly sales and cost reports in a safe place outside the building so figures can be proven.
A retailer next to a burst water main
A municipal water main breaks two doors down and the street is closed to traffic for weeks. The shop itself is untouched but customers cannot get in. The owner assumes the policy will respond.
First steps. Ask the broker whether the cover responds when access is blocked by an event off the premises, since many forms need physical damage at the insured location. Learn about civil authority and similar extensions, and how they are triggered, before you need them.
A manufacturer relying on one component supplier
A small manufacturer buys a key part from a single supplier. A fire at the supplier's plant would stop production for months even though the manufacturer's own building is fine.
First steps. Name the supplier and the parts concerned to the broker and ask about dependent business cover and its limits. Also discuss alternative suppliers and stock levels, since insurers will want to understand how replaceable the part is.
05 / Words you will hear
The jargon, in plain words
- Indemnity period
- The stretch of time after damage during which lost income is paid for. It should last as long as recovery realistically takes, including re-opening and winning customers back.
- Waiting period
- The first stretch of a shutdown, often counted in days, before this cover starts to respond. Income lost inside it is yours to absorb.
- Gross earnings
- Revenue less certain costs that stop when you do, such as materials. It is the usual basis for working out how much lost income to insure.
- Extra expense
- Added costs of keeping going after a loss, like renting temporary space or paying for rush shipping, that you would not otherwise have spent.
- Dependent property
- A supplier or customer site whose damage hurts your income even though your own premises are fine. Cover for it is arranged specifically and named in the policy.
06 / Common mistakes
What trips people up
- Assuming it pays whenever business drops, when it generally needs physical damage from an insured cause.
- Choosing an indemnity period equal to the time to rebuild, forgetting how long customers take to return.
- Stating income as if the business is stable when it is growing or seasonal, so the figure does not reflect real exposure.
- Forgetting that suppliers, power outages and blocked access may need separate extensions.
- Not keeping financial records somewhere safe, which makes proving a loss slower and harder.
- Treating it as a stand-alone policy, when it often depends on the property policy it sits beside.
Ready when you are
Turn this into one clear request.
Save it, add what you know, and choose when to send it. A licensed broker who handles business interruption insurance takes it from there.
07 / Questions people ask
Straight answers
What does business interruption insurance cover?
It covers the income you lose and certain continuing costs while a covered event, usually physical damage to your premises, stops or slows your business. Many forms also pay extra expenses to restart sooner. What triggers it, what counts as a covered cost and how long it pays are set by the policy wording, so those are the first things to read.
Does business interruption insurance cover a pandemic or closure order?
Often not. Many policies need physical damage from an insured cause, and some exclude communicable disease or government orders. Wording and extensions vary widely and have been the subject of disputes, so ask your broker to show you exactly what the policy says about closures and what, if anything, can be added.
What is a waiting period on business interruption insurance?
It is a set time after a loss begins during which the policy does not yet pay, similar to a deductible measured in time. A longer wait can reduce the price but means you carry the early costs yourself. Ask your broker how it is measured and what you would need to cover through that time.
How is business interruption loss calculated?
Generally by comparing what your business would have earned without the loss to what it actually earned, and adding allowed continuing costs, using your financial records and trends. Insurers may bring in an accountant to assist. Good, current records speed the process, so ask your broker what documents they would want.
Do I need business interruption insurance if I have property insurance?
Property insurance repairs or replaces damaged assets, but it does not usually replace the income lost while you are closed. Business interruption cover is designed to fill that gap. Whether you need it depends on how long you could survive without trading, so talk through that honestly with a licensed broker.
General information, not insurance advice. Broker.insure is a directory and request service: it is not an insurer and does not quote, bind or advise. Policy terms, availability and what is required where you live depend on your situation and on licensed professionals. Updated 2026-10-31.