Business interruption insurance covers a business for loss of income during periods when they cannot carry out business as usual due to damage caused by a specific set of perils that will be specified in the policy. It aims to replace certain losses sustained by the business during the period of the disruption. These perils can include damage to the premises caused by incidents such as a fire, flooding or other physical damage.  

Most policies will cover business interruption as a result of: 

• Damage caused to your premises or equipment by a named peril such as fire, storm or flooding

• Breakdown of essential equipment

• Some policies may also cover business interruption as a result of people not being able to access the business due to specific circumstances (such as the police cordoning off an area due to an event such as terrorism, a fire, or the risk of a collapsing building etc.). In many cases, this is known as 'restricted access' cover or 'non-damage business interruption' cover and is usually an add on to a standard policy that can cost more. 

If you make a claim, business interruption insurance will compensate you for any (pre-tax) shortfall in profits and any increased costs of running your business as a result of the event, for example any extra accountants’ fees you might have to pay. 

Business interruption insurance is usually offered as an optional extra to business insurance packages, which combine a number of different policies under one premium. It can also be offered as an optional extra to buildings and contents insurance policies in some cases. Most businesses purchase a package of insurance from a broker who will work with them to ensure that they have the appropriate cover for their needs.