Business Interruption & Contingent Business Interruption Insurance

Business interruption insurance, generally part of a Commercial General Liability Policy (CGL), covers a businesses’ loss of income when a hurricane or other natural disaster affects its ability to function.  This can include lost profits, operating expenses, expenses for moving the business to a temporary location and other expenses which may be incurred due to the interruption.

Some business may also have contingent business interruption insurance which reimburses them for lost profits due to a supplier or distributor being unable to provide them with products or materials (such as a company in Kansas who receives goods from a company in New Jersey that was damaged in Superstorm Sandy).

These types of policies are generally part of a company’s business primary insurance policy which covers physical damage to the business.  Unfortunately, unless your business lost inventory or supplies, insurance companies often deny these types of claims if a business can adequately continue its operations from another location (home, satellite office, etc.) without extra expenses.