Business Interruption/Income and Extra Expense Insurance

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What is Business Interruption/Income and Extra Expense Insurance?

Running a successful business is no small feat, and Business Interruption/Income and Extra Expense Insurance can be critical. Entrepreneurs and business owners invest considerable time, effort, and money to establish and maintain their operations. However, unexpected events such as natural disasters, accidents, or other disruptions can jeopardize a business’s continuity and profitability. Keep reading to learn about the importance of this insurance coverage, how it works, and why it should be an integral part of every business owner’s risk management strategy.

Business Interruption & Extra Expense Insurance - The Craven Agency

Understanding Business Interruption/Income Insurance

Business Interruption Insurance is a type of coverage designed to protect businesses against financial losses resulting from an interruption in their operations due to a covered event. While property insurance may cover physical damage to a building or other property caused by things such as fires or floods, Business Interruption Insurance covers the income loss during the period of business closure or limited operation.

Imagine a scenario where a devastating fire breaks out in a retail store, leading to severe damage and forcing the store to close temporarily for repairs. During this downtime, the business will likely suffer a significant loss of income as it is unable to generate sales. Business Interruption Insurance helps mitigate this loss by providing financial support to cover ongoing expenses and lost profits during the period of interruption.

Understanding Extra Expense Insurance

Extra Expense Insurance complements Business Interruption coverage by providing funds to cover additional costs that a business may incur to minimize the impact of the interruption. These expenses could include renting a temporary location, expedited shipping to fulfill orders, or the cost of outsourcing work to maintain operations while the business’s primary location is being restored. 

Why Business Interruption/Income and Extra Expense Insurance Matters

  1. Protection against Revenue Loss: Business Interruption Insurance ensures that a business doesn’t have to bear the entire brunt of financial losses when forced to halt operations temporarily.

  2. Continuity and Survival: Having a safety net in the form of insurance can be the difference between a business surviving a disaster, or going under. It provides the necessary resources to keep the business afloat until it can resume normal operations.

  3. Employee Support: Business Interruption/Income Insurance also helps maintain employee wages and benefits during the period of disruption, fostering loyalty and retaining skilled workers.

  4. Peace of Mind: Knowing that your business is covered against unexpected setbacks allows business owners to focus on recovery and rebuilding instead of worrying about financial ruin. 


Business Interruption/Income and Extra Expense Insurance are vital components of any comprehensive risk management strategy for businesses. They provide a financial safety net during times of crisis, ensuring that businesses can weather the storm and resume their operations with minimal long-term damage. Without this insurance coverage, a single unexpected event could prove catastrophic, potentially leading to the permanent closure of a business that has taken years to build.

Business owners should carefully assess their insurance needs and consult with experienced insurance professionals to tailor policies that suit their unique circumstances. By proactively preparing for the unforeseen, businesses can confidently face challenges, secure in the knowledge that they are protected against disruptions that threaten their livelihood.

To learn more, contact a licensed agent at The Craven Agency.

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