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Does Business Insurance Cover Loss of Income?

Loss of Income

In the event that a business faces misfortune, business insurance can cover loss of income and several other areas. 

To protect themselves against financial and legal risks, companies tend to combine several business insurance policies in one policy, called a business owner’s policy. This typically combines business interruption insurance with property insurance and general liability insurance as well. 

For many new businesses, having a safety net can help secure their future. This is because 20% of small businesses typically fail within their first year. Investing in business interruption insurance can help cover the loss of income and pay for:

Employee Wages

If your business is closed, you’ll be able to keep paying your employees up to one year under the majority of business interruption policies. 


Meeting your tax obligations can be difficult if your business is somehow impacted. An insurance plan can help you pay your annual and quarterly taxes, even if your revenue slows down. 

Loan Payments

If you’re under the pressure of making loan payments on time, having insurance coverage can prevent you from taking money out of pocket and meeting deadlines. 

Lost Revenue

If you experience property damage, business interruption insurance can help compensate for lost revenue and impacted sales and prevent a temporary closure from becoming more permanent. 

Rent and Lease Payments

Some of your major business costs like rent and lease payments might still have to be paid even if you need to close down temporarily. Having coverage can help you make your payments on time. 

However, business interruption insurance does not cover things like flood and earthquake damage, undocumented income not noted on your financial records, the cost of utilities, and pandemics and diseases such as COVID-19. 

Some factors that can impact the cost of a business interruption policy include the number of employees you have, the amount of coverage you have, your geographic location, and industry. 

At the end of the day, investing in a business owner’s policy can help cushion your company against financial aftershocks caused by interruptions. Typically, businesses with under 100 employees and annual revenues of up to about $5 million or less are prime candidates.

For more information on other essential forms of insurance coverage that you should look into, such as worker’s compensation insurance, feel free to read our other insurance guides. 

If you have any questions about business insurance, contact us today at Assured Standard!

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Assured Standard will protect your business with the right insurance, depending on your needs. Now more than ever, it’s crucial to have the right general liability insurance experts on your side. Protecting the future of your business starts today.
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