Other Coverages Included in Business Owner's Policy
Business interruption insurance provides coverage if the business premises, vital business equipment, or other business property becomes unusable because of a fire, explosion, or similar covered property peril. As a result most businesses will suffer:
- loss of net profit that would have been earned, and
- payments for expenses that continue even though the business is not operating normally (e.g., debt payments, taxes, salaries, and employees).
These losses may be covered by business interruption insurance. The purpose of business interruption insurance is to provide the business owner with what the business itself would have done if there had been no loss. Business interruption insurance is included in the BOP but may also be purchased as an endorsement to the fire policy.
Extra expense insurance provides coverage for a business to continue operating regardless of the extent of damage to their property. Many businesses can resume operations fairly rapidly but may incur extra expenses by relocating to temporary facilities, buying or leasing replacement equipment, supplies, furniture, and machines, quickly getting in new merchandise, and notifying clients and customers of the move. Extra expense insurance provides coverage for these increased costs of resuming business.