How Is Business Interruption Insurance Calculated?
The policy applies its business-income definition to the covered interruption, accounting for projected income, continuing expenses, saved costs, and policy limits.
A claim calculation generally compares the income the business would reasonably have earned without the covered interruption with its actual results during the restoration period, while accounting for expenses that continued and costs that were avoided. The policy defines the covered income measure and may address payroll, extra expense, seasonality, and partial operations. Payment is limited by the covered trigger, period, waiting period, and available limit.
Read the form’s business-income definition and records clause before a loss. Maintain financial statements, sales histories, budgets, payroll, invoices, and expense records. Ask whether the limit is actual-loss-sustained or capped, and how the policy handles trends, resumed operations, and extra expenses.
Related Coverage
Sources
- Business Interruption and Business Owner Policy. National Association of Insurance Commissioners; Background; Commercial property; Business interruption; Contingent business interruption. Accessed 2026-09-25.
- FAQ on business interruption insurance and other issues affecting California small businesses. California Department of Insurance; Business interruption trigger; COVID-19 income loss; policy exclusions; civil authority. Accessed 2026-09-25.
- What Business Income Loss Coverages Are Out There? Learn the Endorsements That Can Help with Lost Business Income. National Association of Insurance Commissioners; Top Considerations; Things You Should Know: business income, extra expense, service interruption, contingent business interruption, civil authority. Accessed 2026-09-25.
- Commercial Property and Business Income Coverage Forms in SES sample policy. Insurance Services Office, Inc.; sample hosted by SES Insurance; CP 00 10 10 12, printed pp.1–16 / PDF pp.7–22: A.1 Covered Property, A.2 Property Not Covered, E.1.b Property of Others, E.1.e Outdoor Property; CP 00 30 10 12, printed pp.1–9 / PDF pp.22–30: Business Income definition, trigger, coinsurance and restoration period. Accessed 2026-09-25.
