Business Interruption & Extra Expense Insurance
Prime Insurance Agency places business interruption and extra expense insurance for businesses across Illinois, Indiana, and Wisconsin — covering both the income you lose when a covered event closes your doors and the additional costs of staying open while you recover.
Property Insurance Rebuilds Your Business. Business Interruption and Extra Expense Keep It Alive While You Rebuild.
Commercial property insurance covers the cost to repair or replace damaged physical assets after a covered loss. What it does not cover is what happens to the business while those repairs are underway.
Rent still comes due. Payroll continues. Loan payments don't pause. A fire, a major water loss, or a storm event that closes a business for weeks or months produces two distinct financial problems — the income that stops coming in, and the ongoing costs that don't stop going out. Business interruption and extra expense insurance address both.
Business Interruption Insurance
What You Lose When You Can't Operate
Business interruption insurance — also called business income insurance — covers the revenue side of a covered property loss.
When a covered event forces a business to suspend or reduce operations, business interruption coverage steps in to replace:
- Net income the business would have earned had the covered event not occurred — calculated based on historical revenue and the projected income for the interruption period
- Continuing normal operating expenses that do not stop because the business is closed — rent, payroll for retained employees, utilities, loan payments, and other fixed costs that continue regardless of whether revenue is being generated
Coverage applies from the end of the waiting period — typically 48 to 72 hours after the covered loss — through the restoration period: the time needed to repair or rebuild the damaged property and return the business to operational condition.
What business interruption does not cover: coverage is triggered by physical loss or damage to property from a covered peril. It does not trigger for pandemic closures, government-ordered shutdowns without physical property damage, loss of a key supplier, or events that do not involve direct physical damage to the business's property. These exclusions are standard across the market.
Extra Expense Insurance
What You Spend to Stay Open
Extra expense insurance covers the other side of the same disruption — the additional costs a business incurs to continue or resume operations during the restoration period, above and beyond normal operating expenses.
Where a business takes immediate steps to stay open after a covered loss — rather than closing completely — those steps typically cost more than normal operations. Extra expense coverage reimburses:
- Temporary location rental — the cost of leasing an alternate business location while the primary location is being repaired
- Replacement equipment leasing — the cost of renting or leasing equipment to replace what was damaged or destroyed during the covered event
- Expedited repair and shipping costs — overtime charges, rush delivery fees, and expediting costs incurred to accelerate restoration and return to normal operations faster
- Operating from a secondary location — the additional cost of running operations from a location other than the primary business address during the restoration period
Extra expense coverage pays the additional cost only — not the normal operating costs the business would have incurred regardless.
How Business Interruption and
Extra Expense Work Together
The distinction between the two coverages is the most important concept on this page — and the one most frequently misunderstood.
Business interruption covers what you lose when you cannot operate normally — the income gap created by the covered event.
Extra expense covers what you spend to minimize that income gap the additional costs of staying open, relocating temporarily, or accelerating recovery so the interruption period is shorter.
A business that closes completely and waits for restoration generates a business interruption claim. A business that rents a temporary space and
keeps serving clients generates an extra expense claim — and may have a smaller business interruption claim as a result. Most businesses benefit from carrying both coverages, because a shorter restoration period achieved through extra expense spending typically reduces the total business interruption loss.
Together they protect both sides of a business disruption — what you lose
and what it costs to recover faster.
How These Coverages
Are Typically Purchased
For most small businesses, business interruption and extra expense coverage are not standalone purchases. Both are typically included within a Business Owners Policy or added as endorsements to a commercial property policy — bundled into the same program that covers the physical property.
If your current BOP or commercial property policy includes business interruption coverage, confirming the coverage limit and restoration period is worth doing before a loss makes the question urgent. Coverage limits set at the time a policy is first written may no longer reflect current revenue or the realistic cost of renting a comparable temporary location.
We review both coverages as part of every commercial property and BOP conversation.
Frequently Asked Questions
About Business Interruption
and Extra Expense Insurance
What is business interruption insurance?
Business interruption insurance covers lost net income and continuing operating expenses when a covered property loss forces a business to suspend or reduce operations. It works alongside commercial property insurance — property insurance covers the physical damage, business interruption covers the revenue loss during the restoration period.
What is extra expense insurance?
Extra expense insurance covers the additional costs a business incurs to continue or resume operations after a covered property loss — renting a temporary location, leasing replacement equipment, expediting repairs. It covers costs above normal operating expenses, not the normal costs themselves.
What is the difference between business interruption and extra expense coverage?
Business interruption replaces lost income during the period a business cannot operate normally. Extra expense covers the additional costs incurred to keep operating during that same period. The two coverages address different financial consequences of the same covered event and are typically purchased together.
Does my commercial property insurance cover lost income if I have to close?
Standard commercial property insurance covers the cost to repair or replace damaged property — not lost income or ongoing expenses during the closure. Business interruption coverage is a separate component that must be specifically included in a BOP or added as an endorsement to a commercial property policy.
What triggers business interruption coverage?
Business interruption coverage is triggered by physical loss or damage to property from a covered peril — fire, storm, water damage, or similar events that make the business location unable to operate. It does not trigger for pandemic closures, government-ordered shutdowns without physical damage, or non-physical loss events.
What is the waiting period for business interruption insurance?
Most policies include a waiting period of 48 to 72 hours before coverage begins. Losses sustained during the waiting period are not covered.
Is business interruption and extra expense coverage available in Illinois, Indiana, and Wisconsin?
Yes. Prime Insurance Agency is licensed in all three states and places business interruption and extra expense coverage — within a BOP or as commercial property endorsements — for businesses across Illinois, Indiana, and Wisconsin.
One Covers the Income Gap. The Other
Covers the Cost of Closing It.
When you call Prime Insurance Agency about business interruption or extra expense coverage, you reach an independent agent who reviews your current commercial program, confirms whether both coverages are in place, and identifies whether the limits reflect your actual business.