What is Business Interruption?
The business interruption policy indemnifies the insured for the loss suffered as a result of an interruption or interference to the business by an insured peril resulting in a reduction in gross profit.
The business interruption exposure is obviously linked to the underlying property exposure, since the policy is triggered by the property policy. The factors considered in assessing the material damage loss also need to be considered in assessing the business interruption exposure. These are not repeated here and users should refer to the Property Section as necessary.
In many cases, the business interruption exposure is even more significant financially than the associated physical loss. Even if there is a partial damage to the building and/or machinery & equipment, it may well stop the operations at the premises for a considerable period of time.