Business Interruption

Business interruption insurance (also known as loss of profit) is a type of insurance that covers the loss of income (gross profit) that a business suffers after a disaster like fire, explosion, cyclone, earthquake, etc. The income loss covered may be due to the disaster-related closing of the business facility or due to the rebuilding process after a disaster. It differs from insurance, in property insurance policy only covers the physical damage to the business, whereas a business interruption policy covers the profits (net profit+ standing charges) that would have been earned. It also provides coverage for the increased cost of working. This cover is applicable to all types of businesses, as it is designed to put a business in the same financial position it would have been in if no loss had occurred. This type of coverage can be added as a standalone policy or included in a package policy. Even for a new project, advance loss of profit policies can take care of financial loss arising out of delay in the project due to accidental damage like fire or any other natural disaster.