What type of loss is covered under "business interruption insurance"?

Business interruption insurance is specifically designed to cover the loss of income that a business suffers as a result of a temporary halt in operations due to covered causes of loss, such as fire, natural disasters, or other insured events. When a business experiences damage that leads to its closure or significantly disrupts operations, this coverage helps to compensate for the income that would have been generated during that period.

This type of insurance also addresses expenses incurred during the period of interruption, such as ongoing fixed expenses (like rent or utilities), and in some cases, can include additional costs needed to expedite the resumption of operations. It is critical for businesses to have this coverage, as it mitigates the financial impact of unforeseen events that may hinder their ability to generate revenue.

The other options provided, while relevant to business operations and risk management, do not fall under the purview of business interruption insurance. Theft of equipment and damage to buildings pertain more to property insurance, which covers physical assets, whereas legal costs from business lawsuits are addressed under liability insurance, which protects businesses against claims resulting from legal actions. Understanding the specific scope of business interruption insurance helps businesses prepare for the financial strains that can occur during unforeseen disruptions.