Business income insurance covers business earnings in the event of an interruptive loss. The ISO forms state that:
coverage is provided for net income (net profit or loss before income taxes) earned or incurred. Coverage is also provided to continue normal operating expenses incurred, including payroll
Think Profit and Loss statement.
Tip. Use a worksheet to determine coverage.
A business income worksheet establishes coverage amounts of business interruption insurance. This establishes dollar amounts of coverage with no uncertainty. Involve your accountant in preparing a worksheet.
When I'm considering Business Income coverage, do I need Extra Expense Coverage?