For any business that relies heavily on performing work at a physical location, there is always a chance that an incident, such as a natural disaster or theft, could damage or destroy the property. Are wildfires common in your area? Are you in a city with high crime rates? A significant disruption to your businessâ€™s day-to-day operations could cost it the crucial revenue required to survive. One safeguard against losses from this type of disruption is business interruption insurance, also known as business income coverage.
This guide will provide you with all the information youâ€™ll need to understand what business income coverage is, how it works, and how to customize a policy to best suit your businessâ€™s specific needs. Weâ€™ve also reviewed the best business interruption insurance companies, including the two below.
- Next offers the most affordable business interruption insurance
- Provides the best online experience of any insurance carrier
- Customers can purchase coverage through a BOP or commercial property policy
Try Next Insurance
- The Hartford offers the best contingent business income coverage
- Business income coverage is included with its BOP
- Offers zero-hour waiting period
Try The Hartford
*By clicking the above links, you will go to one of our insurance partners. The specific companies listed above may not be included in our partnerâ€™s network at this time.
Understanding Business Interruption Insurance
As a business owner, you want to do everything you can to protect your business, no matter the circumstances. Of course, you donâ€™t just want your business to operate as usual, but you also want it to grow and thrive. Business interruption insurance will help your business bounce back quickly and get back on track if an unfortunate situation prevents it from bringing in revenue for a period of time.
This section will provide you with the details on exactly how business interruption insurance works, and how different types of businesses might benefit from this coverage.
What Is Business Interruption Insurance?
Business interruption insurance covers your business when a disaster occurs that causes interruption to normal business operations, and subsequently causes a loss of income. This type of insurance policy is most often used in the event of natural disasters, but it may also cover events such as theft and vandalism that cause business interruption. Some policies may even cover things like electronic attacks or pandemics, depending on the policy terms.
Business interruption insurance is often provided within a business owner’s policy or commercial property insurance policy. Any business with employees on their payroll, recurring bills, equipment central to the functioning of the business, or monthly rent payments can benefit from business interruption insurance.
Business Interruption Insurance vs. Loss of Rent
Business interruption insurance should not be confused with loss of rent insurance, a similar but distinct type of insurance for business owners. Business interruption insurance covers a range of losses due to business interruption following a disaster. In contrast, loss of rent insurance is specific to landlords that lose revenue from rent payments if a space that they own has become uninhabitable due to a disaster.
One important item to note about rent loss insurance is that it reduces the risk associated with rent loss, but may not cover the rent amount that was agreed upon between you and your tenant. The covered amount is based on the fair market rental value (which is another name for this type of coverage). So, your insurance carrier will decide what rent amount they will cover for your uninhabitable space.
How Does Business Interruption Insurance Work?
Business interruption coverage works like other insurance policies and coverage, though the exact terms and processes can vary between providers. When a disaster occurs that causes your business to shut down temporarily, you will contact your insurance provider to file a claim, and a claims expert will help you through the process.
Before you file a claim (ideally before a disaster occurs), be sure to read through your policy thoroughly to understand exactly what is and isnâ€™t covered. This will allow you to focus your claim on the items that are most definitely covered by your insurance, allowing you to maximize your payout with minimal headache.
In addition to fully understanding your coverage, you must make sure you have the proper documentation to provide if you ever have to make a claim. This might include proof of past lease payments and their amounts, previous payroll expenses, and a record of your businessâ€™s profits over time. Additionally, if your businessâ€™s income was growing at the time of the incident, you will want to have documentation of this growth so that it can be reflected in your coverage.
You must notify your insurer of the claim as soon as possible after the incident. This will allow a timely investigation into your claim, which will benefit you as you receive payment for the losses covered.
Most business interruption policies include a waiting period deductible in place of a dollar amount deductible. For example, coverage may not begin until 72 hours after the covered event occurred, meaning that losses during those 72 hours would not be covered. Information about your waiting period deductible should be stated clearly in the terms when you purchase the policy.
Your terms will also vary depending on the amount of coverage youâ€™ve purchased. For example, the policy will only cover interruptions for a given length of time (the restoration period), and there will be limits to the amount that the policy will pay for the losses (coverage limits).
What Does Business Interruption Insurance Cover?
Business interruption insurance covers lost income during an interruption resulting from a covered peril, such as theft, fire, or burst pipes. Additionally, it covers expenses that your business is unable to pay due to that loss of income. Some of these expenses include:
- Employee wages to maintain your workforce in the interim
- Monthly rent/lease payments for your businessâ€™s physical space
- Recurring business loan payments due during interruption
- Taxes due during interruption
- Moving costs if you are forced to relocate temporarily or permanently
While business interruption insurance is designed to protect businesses against natural disasters and theft, key person insurance is designed to protect against the loss of a key employee or owner due to disability or death.
Common Exclusions to Business Interruption Insurance
While business interruption can save your business if a disaster occurs, it does not cover all of the expenses and losses your business might face. Often, businesses will require multiple different types of insurance to cover all losses in the event of a major disaster. Here are some items that will most likely not be covered by a business interruption insurance policy:
- The cost of physical damage to business property (covered by commercial property insurance)
- The cost of items or money actually stolen in the event of a theft-related claim (covered by business crime insurance)
- Third-party claims against your business due to injuries and damages (covered by general liability insurance)
- Smaller interruptions to business operations that only last a few hours, such as a small fire or a power outage
- Utility expenses, such as electricity and water bills, are usually not covered; most businesses turn off these services during an interruption of business
Additionally, business interruption insurance is not applicable if your business decides to close its door immediately following a disaster. Losses are only covered by business interruption insurance when there is an interim period of interrupted business operations.
Additional Business Income Coverage Options
If you are looking for extra coverage to protect your business, there are additional types of business income coverage options and policy add-ons that you can consider tacking on to a business insurance or property insurance policy.
Depending on the insurance provider you choose, some of these coverage options will automatically be included in your base policy, while others may require you to purchase policy extensions. Some insurers may also offer a standard option for these coverages as part of their base policy, with the option to broaden them for an additional charge.
Contingent Business Interruption Coverage
Contingent business interruption coverage is a policy add-on that covers losses your business may experience if a major customer or supplier experiences a business interruption due to a disaster. This coverage is beneficial for businesses who rely heavily on income from a major client, or the services of a single supplier, to continue to function.
This coverage is often purchased as an add-on to an existing business income or property insurance policy. However, some providers may include this within their base coverage with a standard dollar limit on coverage.
Extra Expense Coverage
Extra expense coverage is often purchased as an extension to a business interruption insurance policy. While business interruption insurance may cover moving expenses to a temporary site, it often does not cover the additional expenses incurred as a result of securing a backup location. This might include an additional rent payment, costs to get the new space ready for use, leasing new equipment, or extra hours worked by your employees to complete the move.
If extra expense coverage is included within the base coverage you purchase, you may want to expand your extra expense coverage, depending on the likelihood that your business secures a temporary location following a disaster.
Extended Business Income Coverage
Extended business income coverage covers the loss of business income for a period of time after the interruption period has ended and operations have resumed. This type of coverage can be beneficial if you lost some of your clients during the interruption, or if you need time to advertise that your business has reopened.
Extended business income coverage typically lasts 30 days, but insurance carriers may provide the option to expand this coverage for up to one year.
Civil Authority Coverage
What if physical damage to a neighboring property causes government authorities to deem your businessâ€™s physical location unsafe and uninhabitable? In these cases, a disaster has not occurred to your business, so a business interruption insurance policy may not apply. A civil authority coverage policy add-on will cover losses your business incurs if civil authorities close your business.
COVID-19 raised questions as to whether this civil authority coverage applies when businesses close for a pandemic. In many cases, non-essential business operations were strongly discouraged, but not prohibited, meaning that civil authority coverage would not apply. However, this situation should be reviewed on a case-by-case basis with the businessâ€™s industry, local COVID-19 regulations, and the wording of a specific insurance policy all considered.
Utility Services Coverage
Utility services interruption coverage is an add-on coverage option to property insurance or other policies with business income coverage. This coverage protects your business when utilities (such as gas, electricity, or water) go out, interrupting your business operations. Some policies will cover your losses until utility service is restored, while others have a time limit for coverage.
When utility services coverage is added to a property insurance policy, it may also cover expenses related to damage to your property as a result of a utility services interruption. For example, if your business is located in an area with a cold climate, losing the ability to heat your facility may cause pipes to freeze and burst. A utility services add-on to property insurance would help you pay for repairs.
Who Needs Business Interruption Insurance?
Businesses of many different sizes and in a variety of industries can benefit from business interruption insurance. However, this coverage is especially important for businesses that rely heavily on a physical location or expensive equipment to bring in revenue and continue to operate. Additionally, businesses that are located in areas with a history of natural disasters and other incidents should consider business interruption insurance, though these factors will impact the cost of coverage.
If youâ€™re trying to decide whether your business needs business income insurance, here are some questions to consider:
- What percentage of your businessâ€™s income is generated at (or relies on) a physical location?
- What losses will occur if a disaster occurs at your businessâ€™s physical location? Is it possible to recoup any of that lost income?
- What is the cost/feasibility of relocating your operations?
- How much of your workforce will you lose if you are forced to withhold pay for a period of time?
In a high turnover industry that relies heavily on service at a physical location to generate revenue, business interruption insurance might save a restaurant, especially one that is locally-owned, in the event of a natural disaster or other peril. Restaurants may benefit from the following coverages:
- Wage coverage included in business interruption coverage can help retain the workforce in a high turnover industry.
- Extra expense coverage may enable a restaurant to relocate if the disaster leads to a longer-term interruption of operations at the original location.
- Restaurants are often located in business complexes and shopping centers, therefore in close proximity to other businesses. Civil authority coverage can protect against losses if a neighboring facility causes the area to be deemed unsafe.
Business interruption insurance is sometimes included within business and property insurance policies for landlords. As mentioned earlier, business interruption coverage and rent loss coverage are two similar options that a landlord might consider.
If a landlord has a property that experiences damage and limits their income from rent payments, they will still need to pay salaries for any management employees and continue to pay the mortgage payment on their space. These items would be covered by business income coverage.
If a space you own becomes uninhabitable and your tenant is no longer required to pay rent, rent loss coverage would cover the assessed value of the space. You could use this coverage to put towards the above expenses, but it may not be the same rent amount that your tenant was paying.
In addition to business income or rent loss coverage, extended business income coverage might also be beneficial to landlords. If tenants move to a new permanent space in the interim of their space being uninhabitable, it may take time for you to find new tenants. In this case, extended business income coverage would cover lost income for 30 days after the space becomes inhabitable again.
General contractors in the construction industry work in many different locations and with many different clients. They also require various pieces of equipment to operate business as usual. To protect their property and their income, many contractors purchase a business owners policy (BOP). These policies often include general liability, commercial property, and business income coverages, and are designed for small or mid-sized businesses with 100 or fewer employees.
The coverages included within a BOP can protect a contractorâ€™s business if an essential piece of equipment gets broken or even destroyed. If that loss is the result of a covered peril, the business income coverage will kick in, covering not only lost income, but also employees’ wages, and other recurring expenses that canâ€™t be covered due to interrupted service.
Many construction contractors also rely heavily on suppliers for lumber and other building materials. If a disaster causes an interruption in service from a supplier that in turn disrupts a contractorâ€™s service, business income coverage may help with the losses.
Manufacturing facilities rely heavily on a large physical location to produce products and generate revenue. If a manufacturing facility is forced to suspend operations, business income coverage will prevent major losses and setbacks. Manufacturers may benefit from the following coverages and policy extensions:
- Manufacturing facilities rely heavily on utilities, such as electricity, water, and gas, to keep operations running smoothly. Just one utility service going out might keep the facility from functioning as usual. Utility services coverage can protect manufacturing facilities from income losses if utilities are interrupted.
- Manufacturing is another high turnover industry. Income coverage that allows your business to continue compensating workers during the interim might save your workforce.
- A manufacturer of a specific product might rely heavily on one supplier of an essential raw material for production. Likewise, a manufacturer might receive a large portion of their revenue from selling products to a few clients. If any of these businesses experience an interruption, contingent business interruption insurance can protect your business.
- Relocating a manufacturing facility is a major task. If this becomes necessary for your business, extra expenses coverage might make it more feasible to pay additional hours for employees, rent a new industrial space, rent new manufacturing tools and equipment, and cover utilities in the new space.
Special Considerations for COVID-19
COVID-19 has presented a unique case when it comes to business interruption insurance claims. Business interruption policies are most commonly designed for natural disasters, but they are also designed for other perils beyond the business ownerâ€™s control. This has raised the question as to whether a global pandemic qualifies for business interruption coverage, even though it is probably not listed as a covered event.
One qualifying parameter for business interruption coverage is that access to the businessâ€™s premise is prohibited, or that business operations are not possible, as a result of the disaster. When it comes to COVID-19, in many areas in the United States, non-essential business was not entirely prohibited, which meant that business income coverage did not apply.
Additionally, some policies contain exclusions for losses due to viruses or bacteria, introduced before COVID-19 as a result of previous epidemics. However, business owners that contain a policy with â€œall-risk coverageâ€ might be in luck if their policy doesnâ€™t contain this specific exclusion.
Even though years have passed since the start of the pandemic, insurers and legislators are still contending with how to best interpret policies concerning COVID-19 losses. In fact, business owners may receive retroactive payments if proposals are passed which require insurers to cover pandemic-related losses. Many states had pending legislation regarding business interruption insurance policies in the 2021 legislative session.
Business Interruption Insurance Costs & Premiums
Just like any other insurance policy, you should do some research to ensure that you are purchasing the right amount of coverage for your business, and getting the best value with the policy you purchase. Continue reading to learn more about how to determine the appropriate amount of coverage for your business, and how much you should expect to pay for your policy.
How Much Business Interruption Insurance Do I Need?
The amount of business interruption insurance coverage a business might need will vary greatly, depending on the industry and the size of the business. The coverage must be enough to cover a more significant period of business interruption, more than just a few days. For example, some policies cover a period of up to one year or more.
What are your businessâ€™s gross earnings and projected income? This is the first question to ask yourself when determining how much coverage your business needs. These numbers will be used when processing your claim to determine how much income was likely lost during a given period. If the coverage you purchase is smaller than your estimated lost income and incurred expenses during the interruption period, your business will need to pay the rest of the losses out of pocket that go above the policy limit.
The next step to take is to come up with a plan in the event of a disaster and consider the expenses that will need to be covered:
- What disasters are you at risk of experiencing in your location and industry? In light of this, how long is an interruption likely to last?
- Will you need additional funds to continue paying workers? If so, how many employees do you have?
- What recurring payments does your business need to cover? Consider your monthly rent payment, business loan payments, and taxes.
- Is your business able to relocate? If so, what expenses will you incur if you need to relocate to a temporary facility in the event of a longer-term interruption?
To summarize, business owners should estimate the monthly expenses they would need to cover in the event of an interruption, as well as the number of months it would likely take to resume normal activities based on the most likely risks. By multiplying these two estimates together, business owners can calculate a rough estimate of business income coverage needs.
How Much Does Business Interruption Insurance Cost?
Because business interruption coverage is typically bundled with other policiesâ€”like a business owner’s or commercial property policyâ€”itâ€™s difficult to estimate the exact cost of a standalone policy. A business owner’s policy, which contains general liability, commercial property, and business income coverage typically costs $600 to $1,200 per year for most small businesses that would purchase that type of policy. A commercial property insurance policy can range from $1,000 to $5,000 per year for most small to midsize businesses.
Factors That Affect the Cost of Business Income Insurance
Factors that increase or decrease your risk of filing a business interruption claim can influence the price of the policy within which this coverage resides. Below, weâ€™ve outlined some factors beyond the size of your business and the amount of coverage youâ€™ll need that might influence the cost of coverage.
Your industry can impact the price of business income coverage, even if you are not at a high risk of filing a claim. If your industry is known for, or simply more likely to file large claims and bigger losses in the event of a disaster, this can influence the price of your monthly premium before a disaster even occurs.
For example, a manufacturing facility with a large workforce and expensive machinery required to operate will likely experience much higher losses from a disaster than a restaurant, or even some contractors.
Your businessâ€™s geographic location can influence the cost of business interruption insurance. Is your business located in an area that gets hit with hurricanes and tropical storms year after year? If you are located in the Midwestern United States, tornado risk might be a factor that plays into the cost of your coverage. On the West Coast, wildfire risk in your area might increase your premiums.
History of Claims
If youâ€™ve had coverage in the past and have filed a claim as a business ownerâ€™s policyholder or commercial property insurance holder, this might increase your premiums moving forward, no matter whether you are purchasing a policy with the same provider or a new one. Information about your claims history is shared between companies, and many companies view a history of filing claims as a strong predictor of filing claims in the future.
Finding the Best Business Interruption Insurance
To identify the best business interruption insurance policy for your business, it is a good idea to shop around with many different providers, get estimates from multiple insurance companies, and take a close look at the terms of each policy to make sure youâ€™ll be adequately protected if a disaster occurs that impacts your business.
Comparing Business Income Insurance Providers
When you begin shopping for insurance policies containing business income coverage, review the following aspects of the insurance policy and provider to determine whether it is the right fit for your business.
Policy Options & Limits
When considering a new insurance policy, the availability of policy options and limits that suit your business is one of the most important factors in selecting an insurance carrier. Some insurance companies are tailored towards small businesses, and may not offer policy limits high enough to adequately cover a larger company. Conversely, an insurance carrier that specializes in coverage for larger organizations will likely provide more coverage options than a small business will need, which often results in higher prices.
Additionally, business interruption insurance often falls within a larger policy, such as a business owner’s policy (commonly held by small business owners) or commercial property insurance. When selecting a policy that contains business income coverage, ensure that the parent policy and the other aspects of its coverage align with your businessâ€™s needs.
Some other key policy options to consider for business interruption insurance include the waiting period (how long you will need to wait before coverage starts) and the restoration period (how long coverage will last). These should be carefully selected based on the specific circumstances of your business.
Looking into the companyâ€™s processes and customer service reputation can be very valuable when considering them as your insurance provider. If you have to file a business interruption claim, it will undoubtedly be a stressful time as a business owner. Youâ€™ll want the claims process to be painless; after all, they are supposed to be there to serve you well during a time of crisis.
Here are some items that youâ€™ll want to look into:
- How do you report a claim? Does the company offer online claims reporting, or do you need to file a claim via phone or email? Do they offer multiple ways to file a claim?
- Does the company offer a 24/7 hotline in case a disaster occurs outside of normal business hours? If not, what days and hours can you contact them?
- How quickly does the insurer respond to claims?
- What do customer reviews say about claims filing experiences with the company? Try to look at third-party sites for unbiased reviews, instead of reviews and testimonials on the companyâ€™s own website.
Cost & Premiums
When it comes to the cost of an insurance policy, the most important thing to do is to compare similar policies to find the one that best suits your businessâ€™s requirements and budget. It is crucial to do a price comparison, evaluating what each company provides at each price point to find the best value based on the coverage your business needs.
Most companies offer business income coverage within larger policies. This is especially beneficial to smaller to medium-sized businesses, allowing them to bundle coverage within one policy to lower costs. However, it is worth considering whether the other coverage features included in the policy are useful to your business. If not, you may want to consider a different provider to avoid paying for coverage that you donâ€™t need.
Another item to consider is the payment schedule for premiums. A small business that is just getting started may not be able to pay a large annual premium upfront. So, a company that offers smaller monthly payments may be more manageable within its budget.
When you are choosing a company to be there for you during the most challenging times, youâ€™ll want a company that is built on stable financials, and reputable themselves. When you are considering purchasing an insurance policy from a carrier, do some digging into their finances.
Financial ratings provided by organizations such as AM Best and Standard & Poorâ€™s provide investors and customers with a reliable gauge on the companyâ€™s financial standing and ability to meet the obligations outlined in the insurance policies they write. For example, an A+ rating by AM Best is â€œassigned to insurance companies that have, in our opinion, a superior ability to meet its ongoing insurance obligations.â€ So, these ratings indicate whether the company is likely to uphold its portion of the contract.
AM Best notes that their ratings do not assess specific policies or coverage options provided by the insurance company, and it does not provide a review of policies and procedures related to claims payments.
In addition to their financial reputation, overall company reputation is equally as important. To find this out, do a Google search to find new articles about current happenings with the company. Check out customer reviews, as well as their rating on the Better Business Bureau.
In addition to online searches, ask around. Do you know other business owners that have experience with the company? Has it been a positive experience, and would they recommend the company to you?
Another consideration when looking into an insurance providerâ€™s reputation is their specialty. If the company most commonly provides personal insurance policies, its expertise in providing services to businesses may not be on par with those specializing in commercial lines. A company that specializes in the type of insurance youâ€™re planning to purchase can be a positive feature.
Best Business Interruption Insurance Companies Overall
Chubb (Best Overall)
Chubb offers business income coverage within their Customarq Property & Business Income Coverage. Chubb is a well-established insurance company that offers a variety of business insurance options.
- Range of policy limits suit a variety of business sizes
- No time limit on interruption period
- Variety of additional features offered
- Strong financial ratings by AM Best
- Policies tend to be pricier than competing insurers
- Not paired with general liability coverage, as provided by other insurance carriers
Chubb is a large insurance company that operates in 54 countries and territories and offers a range of both commercial and personal policies. The current Chubb corporation was formed when Chubb was acquired by ACE Limited in 2016, and they began operating under the name Chubb. The Chubb Corporation, however, dates back to 1882, while ACE Limited was established in 1985.
Chubbâ€™s business interruption insurance is included within their Property and Business Income Insurance Policy. They offer a range of limits, from $250,000 to $2 million, which is suitable for a variety of business sizes. The default limit for most policies is $500,000.
Chubbâ€™s business income coverage includes an â€œunlimited period of indemnity.â€ This means that while some providers may limit interruption coverage to a specific timeframe, often ranging from 30 days to 6 months, Chubb will cover any length of interruption until your business operations are restored.
Chubb classifies their property and income coverage as â€œbroad all-riskâ€ perils, meaning that a range of incidents leading to property damage or business interruption will be covered. Some items that they include are damages as a result of a change in temperature or humidity, water damage, or mechanical breakdown.
In addition to their base coverage, Chubb offers additional extensions, such as other locations, extra expense coverage, loss of utilities, ordinance or law, and worldwide dependent business premises. These extensions will allow you to determine the specific types of additional coverage that will best protect your business in the aftermath of a disaster. Coverage is targeted toward industries including real estate, communications, finance, healthcare, education, manufacturing, retail, technology, and business services.
Chubb helps you determine how much business income coverage you need using their online business income consultation tool. They also allow you to start a quote online. In addition to these tools for prospective clients, Chubb allows customers to report a claim online, via email, or by phone 24/7.
In December 2021, AM Best assigned Chubb U.S Group of Insurance Companies an A++ (Superior) financial strength rating, and an aa+ (superior) issuer credit rating, as well as a stable outlook on both ratings. There are few companies with as strong of a reputation as Chubb, and their customers are willing to pay a premium for the financial protection and level of customer service that Chubb provides.
Chubb offers an unlimited coverage period for business income losses, a range of policy limits, and a variety of available extensions. Because of these features, we recommend Chubb as having the Best Business Interruption Insurance Overall.
The Hartford (Runner-Up; Best Contingent Business Income Coverage)
Business Interruption Coverage offered by The Hartford is included within their Business Owners Policy. This company offers both personal and business insurance policies and is a great option for small businesses.
- Business income coverage is included in its business owners policy (BOP)
- Zero-hour waiting period; coverage begins at the time of the covered event
- Variety of extensions offered to customize and broaden coverage
- Strong financial ratings by AM Best and Standard & Poorâ€™s
- BOP coverage is tailored primarily towards small businesses, and may not be ideal for larger companies
The Hartfordâ€™s 200-year history suggests that they are a well-established company that will remain a stable and dependable insurance provider well into the future. This company began as a fire insurance provider in 1810, and today, it is a Fortune 500 company that is best recognized for its partnership in offering auto insurance to AARP members.
The Hartfordâ€™s business owners policy includes three main areas of coverage: general liability, property, and business income coverage. In addition to this coverage, they also offer a range of business income-related extensions, including:
- Business Income Extension for Off-Premises Utility Services: Provides coverage when loss of utility services causes a business interruption.
- Business Income for Dependent Properties (Contingent Business Income Coverage): Protects your business in the event that a primary supplier or customer experiences a business interruption that subsequently causes income loss or interruption for your business. This is included in their base coverage, and additional coverage is also available.
- Extended Business Income: Covers a period following an interruption to allow you to regain your previous income level.
- Business Income Extension for Electronic Vandalism: Provides coverage when an electronic attack leads to business interruption.
- Business Income Extension for Off-Premises Operations: Provides coverage when damage to equipment or tools occurs at an off-premise job site. This may be helpful for a construction business, for example.
- Business Income Extension for Cloud Service Interruption: Provides coverage when a cloud service outage causes you to lose access to important data and leads to business interruption.
- Business Income Extension for Essential Personnel: Provides coverage when the unexpected absence of an essential employee leads to business interruption.
The Hartford offers business income coverage options that cover actual loss sustained (ALS) and contain no dollar limit on losses covered. They offer coverage durations of 6-24 months, depending on the plan you choose. Clients can report a claim online or over the phone 24/7, a very valuable feature when a disaster occurs outside of normal business hours. According to their website, the average cost of a BOP for The Hartford customers is $3,135 per year or $261 per month.
The Hartford boasts strong financials, receiving A+ ratings from AM Best and Standard and Poorâ€™s. In addition, its credit rating outlook is classified as stable by AM Best, Moodyâ€™s, and Standard and Poorâ€™s.
A combination of having no waiting period, excellent policy extensions, and strong financials makes The Hartford our Runner-Up pick for Business Interruption Insurance. We also recommend The Hartford as offering the Best Contingent Business Income Coverage, which is included in their standard policies.
Next Insurance (Most Affordable Business Income Coverage)
Next Insurance is a newer startup insurance company tailored towards small businesses. They boast 100% online services, offering quotes and claims filing online or from their app. Their business income coverage is included in their business personal property insurance, or their business owners policy.
- 100% online service
- Affordable pricing and monthly payment option
- Option to purchase business income coverage with BOP or business personal property insurance
- Online price calculators will provide a rough cost estimate before you get a quote
- Newer startup company, not as well-established as other insurance companies
- 6-month period of restoration: some industries and situations may require a longer coverage period
Next Insurance is a new insurance company, founded in 2016, so they cannot offer the history and experience that other insurance companies have. However, they offer a modern approach to insurance and aim to improve insurance by simplifying service and bringing it online. According to their website, Next insures more than 300,000 small businesses.
Nextâ€™s business personal property insurance covers losses as a result of damage to your businessâ€™s equipment, inventory, furniture, and upgrades made to your space. This policy also includes business income coverage. This means that if a disaster causes your businessâ€™s property to be damaged and forces your business to close, both losses from the damaged property and lost income during the interruption will be covered.
Nextâ€™s business owners policy is ideal for businesses who want to bundle multiple types of coverage. Like other BOPs, their policy includes property insurance, which still includes business income coverage. They also allow you to add coverage to their standard BOP, such as workersâ€™ compensation insurance. They tailor coverage to specific industries to provide the best protection for scenarios your business might encounter.
Next Insurance offers a 6-month period of restoration for business income claims. There is no waiting period for business income coverage, so coverage begins automatically for claims that are approved within your property insurance terms.
Next Insurance offers 100% online service, so you can get a quote online quickly, instead of waiting to hear from a local agent. This is an ideal feature for business owners who need coverage quickly or are simply busy and want to reduce time spent shopping for coverage.
In addition to instant online quotes, Next also offers online claims reporting. Policyholders have the option to begin the claims filing process online or using their mobile app on a smartphone. For those who prefer to speak to someone about their claim, Next also offers the option to report a claim over the phone.
Next Insurance offers business personal property premiums (including business income coverage) for as low as $18/month. Additionally, they offer an online price calculator before you begin the process of getting a quote. This tool will provide you with a price estimate based on your location and industry.
Despite its reputation as a newer startup company, AM Best has assigned Next Insurance with an A- financial strength rating, and an A- credit rating, with a stable outlook. They are also BBB accredited with an A rating.
Next Insurance is an affordable option for small business owners, and they offer monthly payment options to break down your premium into smaller amounts paid over time. Their policies are simple and easy to understand, and coverage is easy to obtain through their online services. Because of this, we recommend Next Insurance as offering the Cheapest Business Income Coverage.
Travelers (Best Extra Expense Coverage)
Travelers Insurance offers business income and extra expense insurance as a component of its business owners policy, along with commercial general liability insurance and commercial property insurance.
- Business income and extra expense coverage is included in the base BOP
- Tailored coverage for a range of industries
- 24/7 claims reporting available
- Strong financial ratings by AM Best and Standard & Poorâ€™s
- No online quotes for business insurance
Travelers Insurance was founded in 1864 and has been providing insurance coverage for over 165 years. In 2004, the company merged with St. Paul Fire and Marine Insurance to create its current state today. The company provides both personal and business insurance but might be most commonly known for its personal auto and home insurance policies.
In addition to its standard BOP coverage, Travelers customizes its policies to best serve specific industries. For example, a BOP for a retailer will automatically include coverage for employee dishonesty. The company also provides recommended add-ons depending on your specific industry.
Travelers does not offer online quotes for its business policies, so you must find an agent in your area for more information on how to purchase a policy. While their goal is to provide personalized, expert service, some business owners may prefer the convenience of an online quote that is provided by other insurance carriers.
Despite its in-person approach to policy quotes, Travelers allows you to file claims online or via email. The company also includes worksheets to complete and send with your email. Alternatively, claims filing is available via phone 24/7.
Travelers Insurance Company Ltd. (TRV) is a publicly traded Fortune 500 company included in the S&P 500. Its financial ratings are A++ by AM Best and AA by Standard & Poor’s. Travelers Insurance also receives excellent feedback from customers.
Extra expense coverage is included within Travelers base BOP coverage for all industries, and they offer tailored recommendations to customize their business owners policy to a range of industries, including professional services, financial services, retail, and more. Because of this, we recommend them as the Best Insurance Company for Extra Expense Coverage.
Hanover (Best Extended Business Interruption Coverage)
Hanover Insurance offers business income coverage within their business owners policy, which includes general liability insurance, property insurance, loss of income and extra expense coverage, and data breach coverage. They also offer additional industry-specific extensions for their policy.
- Hanoverâ€™s BOP also includes data breach coverage in addition to standard BOP coverages
- Extended business income coverage is included in the base BOP coverage, with the option to increase coverage to 360 days.
- ALS (actual loss sustained coverage) with no limit
- Hanover Insurance Group is BBB accredited with an A+ rating
- No online quotes are offered; you must contact an agent for a quote
The company began as Hanover Fire Insurance Company in New York in 1852. In 1911, Hanover expanded to offer other types of insurance policies and updated its name to Hanover Insurance Group in 1958 to reflect this broadening of its policy offerings. Hanover has been in existence for more than 170 years and is headquartered in Worcester, MA today.
Hanoverâ€™s base coverage when you purchase their business owners policy includes ALS (actual loss sustained) coverage with no monetary limit on coverage. This means that they will cover all of the losses that you incur during the coverage period as the result of the covered disaster or other events.
Additionally, the base coverage includes a 12-month covered interruption period, with the option to adjust the coverage period to 3, 6, 9, 18, or 24 months based on your businessâ€™s needs. Along with this coverage period, a 30-day extended business income coverage is included, with the option to expand this coverage up to 360 days.
In addition to its base coverage, Hanover offers industry-specific endorsements and other extensions. Some examples include business income and extra expense coverage for a data breach, business income coverage for food contamination, civil authority coverage, off-premises utility services interruption, and contingent business interruption coverage.
Hanover Insurance allows clients to report claims online, via their mobile app, or by calling the 24/7 claims phone number. This variety of claims reporting options, as well as 24/7 availability of service can be very important when a disaster occurs.
Hanover Insurance Group received an A financial strength rating (excellent) from AM Best and Standard & Poorâ€™s and an A2 rating by Moodyâ€™s. Their credit rating by AM Best is bbb+ (good), and their Standard & Poor’s credit rating is BBB. They are a Better Business Bureau Accredited business with an A+ rating.
As a result of Hanoverâ€™s automatically included 30-day extended business income coverage, with the option to broaden to 360 days, along with their strong financial ratings and company reputation, we recommend Hanover Insurance for the Best Extended Business Interruption Coverage.
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