Business Interruption Insurance

Business interruption insurance offers a helpful safety net by covering lost income when a business can’t operate due to a covered loss.

What Can Business Interruption Insurance Cover?

Lost income

If your business has to temporarily close because of a covered peril your policy may reimburse the income you would have earned had you remained open.

Fixed costs & ongoing expenses

Even when your business is closed or operating at reduced capacity, expenses like rent, utilities, taxes, loan payments, payroll, and other overhead still continue. Business interruption coverage often helps to cover these ongoing costs.

Extra expenses/temporary relocation

Helps with unexpected costs to keep your business going, like renting temporary space, fast-tracking repairs, or setting up short-term operations.

Contingent business interruption

If your business relies on a key supplier or customer who experiences a loss (such as damage to their facility), your operations could be impacted even if your own location remains unaffected.

Indemnity period

This coverage applies for a set duration, typically lasting until your business returns to “normal” operations or reaches a predetermined maximum period.

Business Interruption FAQs

What’s typically not covered by business interruption insurance?

Many policies only provide coverage if there is physical damage to your property or to a key supplier’s property. Closures ordered by the government without any physical damage may not be covered unless you have a specific endorsement.

Other common exclusions include pandemics or viruses, supply-chain disruptions not caused by a covered peril, utility failures originating off-site, and losses from undocumented income.

Do I automatically have business interruption insurance with my commercial property policy?

While many commercial property policies in Saskatchewan may include some business interruption coverage, it is not guaranteed and may not be comprehensive. Coverage could be limited in scope, have a short indemnity period, or exclude extra expenses or contingent losses. It’s a good idea to speak with a Cooke Insurance broker to ensure your policy provides the protection your business needs.

How long does business interruption coverage last for my business?

The duration of coverage is determined by your policy’s indemnity period. Many standard policies provide 12 months of coverage, but depending on your business’s complexity, seasonality, and risk exposure, you may need a longer period. Consulting with your insurance broker can help you explore the options that best suit your business.

If my supplier in another province suffers a loss and I lose revenue, am I covered?

Coverage typically applies only if you have a specific endorsement for contingent business interruption. Standard policies usually do not cover losses caused by a third party’s property or operations. If your business relies heavily on a single supplier, it’s wise to discuss adding this coverage with your insurance broker.