Business Interruption Insurance: What Happens If You Can't Open Tomorrow?
Most business owners insure the building. Fewer insure the income.
A fire, flood, or major equipment failure doesn't just damage property, it stops cash flow. Rent is still due. Wages are still due. Loan repayments don't pause because your doors are closed. This is the gap business interruption insurance is built to cover, and it's one of the most overlooked protections in a standard insurance program.
What business interruption insurance actually covers
Business interruption (BI) insurance replaces the income a business loses while it can't trade normally after an insured event, typically fire, storm, flood, or other property damage covered under your business insurance policy. It's not a standalone product; it usually sits alongside your commercial property or business insurance as an add-on or extension.
Depending on the policy, BI cover can include:
Loss of gross profit : the income you would have earned if the disruption hadn't happened
Increased costs of working : temporary premises, equipment hire, or overtime needed to keep trading
Ongoing fixed costs : rent, loan repayments, wages, and other expenses that don't stop just because revenue has
Additional indemnity periods : cover that extends beyond reopening, while trade rebuilds back to pre-loss levels
That last point matters more than most business owners realise. Reopening your doors isn't the same as reopening your revenue. A café that loses six weeks of trade doesn't just lose six weeks of customers, some of them have already found somewhere else to go.
Why this gets overlooked
Business interruption is easy to skip because the need is invisible until the moment it isn't. Most businesses insure the physical asset (the building, the stock, the equipment) because that's tangible and easy to value. Income is harder to quantify in advance, so it's often underinsured or left out entirely.
There's also a common assumption that property insurance "covers everything." It doesn't. A payout for storm damage to your premises won't replace the income lost while repairs are underway, that's a separate calculation, and without BI cover, it's a cost the business absorbs alone.
How it connects to other cover you may already hold
If you've read our previous guide on commercial property insurance, business interruption is the next logical conversation. Property cover protects the asset; BI cover protects the business that operates inside it. Most brokers will look at the two together, because a gap in one undermines the value of the other.
The same logic applies to the sum insured conversation we've covered before, BI cover is only as useful as the figures behind it. Underestimating your indemnity period or annual gross profit means underinsurance, even if the policy itself looks comprehensive on paper.
Getting the numbers right
The hardest part of business interruption insurance isn't deciding whether to have it, it's calculating the right level of cover. This usually requires:
An accurate gross profit figure, reviewed annually as the business grows
A realistic indemnity period based on how long recovery would genuinely take (not just rebuilding time, but trade recovery time)
An understanding of seasonal trading patterns, especially for businesses with uneven revenue across the year
These aren't figures to estimate once and forget. A business that's grown significantly since its last review may well be underinsured on BI cover, even if no other part of the policy has changed.
Talk to a broker before you need to
Business interruption insurance is one of those policies you hope never to use and are grateful for the one time you do. If it's not something you've discussed with your broker recently (or at all) it's worth a conversation before, not after, an event forces the question.
This article is general information only and doesn't take into account your personal circumstances. Speak with a Remingtons broker about cover tailored to your business.