This policy protects a business against revenue losses that may occur as a result of a catastrophe. Many company owners believe that their existing Property Insurance would cover their lost earnings, but this is not the case.
Specifically, these policies are based on the premise that any firm that derives revenue from physical assets would lose revenue potential in the event of a catastrophe. While Business Property Insurance protects the physical assets, it does not protect against income loss. This has resulted in firms losing so much revenue that they have been forced to close. This is especially true for organisations whose primary source of revenue is directly related to physical assets and for which the loss of these resources for a lengthy period of time results in a total or almost complete incapacity to produce revenue. Businesses that depend on physical product sales (such as wholesalers) as well as businesses that rely on foot traffic both need Business Income insurance.
The cost of these plans varies significantly. The primary factors affecting the cost of Business Interruption Insurance are the size of the business and the quantity of business revenue required to keep the business operating in the event of a calamity. Consider the number of physical assets that are directly related to your profit stream, as well as the amount of costs that would need to be reimbursed in the event of a loss. This may be accomplished by completing an application for Business Interruption Insurance. This sum will vary according to the nature of the company.