Business Interruption Insurance Calculator
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About Business Interruption Insurance
Business interruption insurance (also called business income insurance) replaces lost revenue when a covered event forces your business to temporarily close. Covered events typically include fire, storm damage, or other property losses. It pays for ongoing fixed costs like rent, utilities, and salaries while your business recovers. The key is selecting an adequate coverage period — most small businesses choose 6 to 12 months. Under-insuring your business interruption risk is one of the most common and costly mistakes business owners make. This calculator estimates the coverage you need based on 80% of your monthly revenue for the chosen recovery period.
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Frequently Asked Questions
What triggers business interruption coverage?
Business interruption coverage is triggered by a covered property loss — such as fire, windstorm, or vandalism — that forces your business to close or reduces operations. It is not triggered by pandemics or government-ordered closures unless your policy specifically includes those.
How long does business interruption coverage last?
Policies typically cover 6 to 24 months, known as the indemnity period. You should choose a period long enough to rebuild, restock, and return to pre-loss revenue levels.
Does business interruption cover payroll?
Yes, most business interruption policies cover payroll for key employees during the interruption period, helping you retain staff so the business can resume operations quickly.
Is there a waiting period before coverage kicks in?
Most policies have a 72-hour waiting period (similar to a deductible) before coverage begins. Some policies have longer waiting periods, so review your policy carefully.
How is business interruption insurance priced?
Premiums are typically 1-1.5% of the total coverage amount per year. Higher-risk businesses or those in disaster-prone areas pay more. It is often included as part of a commercial property or BOP policy.
Results are estimates only. Actual premiums depend on underwriting factors specific to your business. Consult a licensed insurance professional for an accurate quote.
How to Use This Calculator
- Enter your details — Fill in the required fields above with your personal or policy information. The more accurate your inputs, the better your estimate.
- Review your results — Your estimate appears instantly as you complete the form. Check the breakdown to understand how each factor affects your numbers.
- Compare and take action — Use the results to compare options, discuss with your insurance agent, or make informed decisions about your coverage needs.
Common Use Cases
- Shopping for a new policy — Get a baseline estimate before requesting quotes from multiple insurers so you know what to expect and can negotiate effectively.
- Reviewing coverage at renewal — Compare your current costs against what this calculator suggests to identify potential savings or coverage gaps before your policy renews.
- Financial planning and budgeting — Factor insurance costs into your monthly budget or long-term financial plan with realistic estimates rather than guesswork.