Texas Department of Insurance
Consumer Protection – Public Education, Mail Code 111-1A
333 Guadalupe • P. O. Box 149091, Austin, Texas 78714-9091
512-322-4310 telephone • 512-305-7463 fax • www.tdi.state.tx.us
Business Interruption Coverage
Having to temporarily close a business damaged by a fire, natural disaster, or other
similar event could cause significant financial hardship for a company. A commercial
property insurance policy might pay to rebuild your physical property, but many
business owners also buy business interruption coverage to pay for lost income,
operating expenses, and extra expenses while they’re restoring their operations after
experiencing a covered loss.
How Business Interruption Coverage Works
Business interruption coverage compensates you for lost income and certain operating
expenses if you are forced to vacate your business because of a loss covered in your
policy. Payments typically begin 24 to 48 hours after the loss occurs or after you pay a
You will only receive payments if your property is damaged or destroyed by a risk or
peril covered by the policy language. Typically, business interruption policies cover
losses from fire, lightning, windstorms (except along the Gulf Coast), vandalism and
theft, vehicles, aircraft, and civil commotion.
Most commercial property policies exclude flood coverage. If you bought separate
policies for flood or windstorm coverage, ask your agent if those policies include
business interruption coverage.
Business interruption coverage usually won’t cover losses from earthquakes, disease
pandemics, terrorism, weather-related evacuations, or loss of electricity or utilities not
directly resulting from damage to your property.
Make sure you understand what your policy does and does not cover. Also make sure
you know your policy’s dollar limits. Review your policy carefully and talk to your
agent if you need clarification.
Types of Coverage
There are four types of coverage that are typically associated with business i