What is Business Interruption Insurance?

Business interruption insurance covers financial losses — lost revenue, fixed ongoing costs and additional expenses — that a business suffers when it cannot operate normally following an insured event such as a fire, flood or storm. It typically pays out for the period of interruption up to a maximum indemnity period, most commonly 12 or 24 months. Policy wording is critical: the COVID-19 pandemic and subsequent Supreme Court ruling in FCA v Arch (2021) highlighted that many policies did not respond to pandemic-related closures unless specific disease or denial-of-access clauses were present. Businesses should review their policy trigger clauses carefully.