When most business owners think about insurance, they immediately think about property coverage. If a fire, hurricane, or flood destroys your building or equipment, property insurance will repair or replace what was damaged.
But here’s the catch: what about your income while you’re shut down?
That’s where Business Income insurance comes in. It’s one of the most misunderstood and overlooked coverages—and yet, it can make the difference between surviving a disaster or shutting your doors for good.
The Harsh Reality
According to the Insurance Information Institute, at least 25% of businesses that suffer a major loss never reopen. And often, it’s not because of the physical damage—it’s because of the income loss during downtime.
Your bills don’t stop just because your doors are closed. Rent is still due, payroll still needs to be met, and vendors still want to be paid. Without revenue coming in, many businesses burn through savings quickly and can’t recover.
One of our clients—a bakery—experienced this firsthand. After a kitchen fire, they had to close for three months. Without Business Income coverage, they would have had to cover rent, payroll, and expenses with zero income. But because they had the right coverage, insurance stepped in and kept them afloat until they reopened.
What Business Income Insurance Actually Cover
Business Income (also called Business Interruption) is designed to replace lost revenue when your business operations are halted due to a covered loss. Think of it as a paycheck for your company during downtime.
Here’s what it typically covers:
- Net Income: The revenue you would have earned if your business stayed open.
- Fixed Expenses: Things like rent, payroll, utilities, and vendor contracts.
- Temporary Relocation Costs (if paired with Extra Expense coverage).
Essentially, it bridges the gap between when disaster strikes and when you’re fully back in business.
3 Things You Need to Watch For
When it comes to Business Income insurance, details matter. Here are three things to keep in mind:
- Know Your Numbers
Don’t guesstimate. Your coverage should be based on your financials—your net income and monthly fixed expenses. If you underreport or guess, you risk being underinsured. - Look for Extra Expense Coverage
This often-overlooked add-on covers the cost of doing whatever it takes to get you back up and running quickly—like renting equipment, moving to a temporary location, or outsourcing work. - Understand Your Waiting Period
Most policies have a 72-hour waiting period before benefits kick in. That’s three full days with no coverage. Make sure you know how this applies to your policy and whether it’s realistic for your operations.
Common Myths (and Why They’re Wrong)
Let’s bust a few myths that lead business owners into dangerous territory:
- Myth 1: “Property insurance is enough.”
Wrong. Property covers your physical assets. Business Income covers your revenue. Two completely different things. - Myth 2: “I’ll just use savings.”
Maybe for a few weeks—but what about months? And what about your employees and vendors? Most “rainy day funds” dry up quickly. - Myth 3: “It won’t happen to me.”
Fires, floods, and burst pipes don’t ask for permission. It’s not about fear—it’s about being prepared.
Why This Is Leadership, Not Overkill
Protecting your income isn’t just about managing “what-ifs.” It’s about leading your business with confidence. You didn’t build your company to worry about whether one accident could shut you down—you built it to grow, support your family, and provide for your team.
And making sure your income is protected isn’t paranoia. It’s leadership.
Final Thoughts
Business Income insurance may not sound exciting, but when disaster strikes, it could be the reason your business survives.
Don’t guess at your coverage. Review your financials, understand your waiting period, and make sure you have the right policy in place. Pair it with Extra Expense coverage, and you’ll have a safety net strong enough to weather unexpected storms.
👉 Not sure if your Business Income coverage is enough—or wondering if you even have it? Let’s chat. Schedule your strategy call today.
Because your business deserves more than a guess. And you deserve the confidence of knowing you’ll keep getting paid—even when life throws you a curveball.