Business interruption insurance replaces lost income after an event, but it responds only where there has been physical damage to property. That requirement defines the whole coverage.
The cover is attached to property insurance
Business interruption is written as part of a commercial property policy rather than sold as a standalone product.
It responds when a covered peril damages insured property and that damage suspends or reduces operations.
The property trigger is what confines the exposure to something an insurer can model and price with reasonable confidence.
Without it, the policy would be insuring the general risk of a business earning less, which is not an insurable event in the usual sense.
The measure is what would have been earned
Payment is based on the income the business would have generated had the loss not occurred, established from its own financial records.
Continuing expenses such as payroll and rent are included where the policy provides for them, since those do not stop when trading does.
Costs that fall away during the interruption are deducted, because the policy restores the position rather than improving on it.
Accurate and current financial records are therefore part of the coverage, since the claim is proved from them rather than from an estimate.
The period of restoration bounds the claim
Cover runs for the time it should reasonably take to repair or replace the damaged property, not for the time the business takes to win its customers back.
Extended period endorsements add a stated number of days beyond reopening to allow for that slower commercial recovery.
Delays caused by the insured's own decisions generally do not extend the period at all.
Understanding where the period ends is what determines whether the cover matches the real recovery time of the business.
Contingent cover extends the trigger elsewhere
Contingent business interruption responds to damage at a supplier's or a customer's premises rather than at the insured's own site.
It still requires physical damage, and it usually names the dependent properties rather than covering a supply chain in general terms.
Businesses dependent on a single supplier frequently discover that distinction only after that supplier's site has been damaged.
Non-damage disruptions sit outside the form
Loss of access, utility failure without damage and government orders are addressed through specific extensions where they are covered at all.
Each extension carries its own trigger, waiting period and limit, and those limits are typically far smaller than the main cover.
A business exposed to such events needs the extensions identified individually rather than assuming the main policy will respond.