COMMERCIAL INSURANCE
Business interruption (BI) definition
Business interruption is a type of insurance that covers loss of gross profit and related costs following insured property damage.
In practice, this means insurance covering loss of gross profits and other costs resulting from insured property damage. Also known as consequential loss. This gives insurers, brokers, reinsurers and risk managers a shared way to discuss the concept when reviewing policies, claims, regulation or market data.
This term is especially useful in property insurance, commercial insurance and claims assessment. It helps clarify what losses may be covered and how policy wording affects the scope of protection. It also helps users compare how insurance is structured, regulated, priced or claimed across different markets.
Business interruption (BI) is closely related to property insurance, consequential loss, indemnity period and all risks. Linking these concepts together helps build a clearer glossary structure and gives readers a stronger understanding of how individual insurance terms connect within wider international insurance practice.
At a glance
- Used in
- Property insurance, commercial insurance and claims assessment.
- Purpose
- Helps clarify what losses may be covered and how policy wording affects the scope of protection.
- Important because
- Clear definitions support better comparison of insurance products, market practices and regulatory requirements across jurisdictions.
- Related terms
- property insurance, consequential loss, indemnity period and all risks.
Example of business interruption insurance
A manufacturer has to recall a faulty product from retailers. Product recall insurance may cover recall costs, communication expenses and other covered losses.