Business Income Insurance Calculator
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About Business Income Insurance
Business income insurance (also called business interruption insurance) replaces the income your business loses when a covered physical loss — fire, windstorm, or other property damage — forces a temporary closure. Coverage is based on your net income plus continuing fixed expenses like rent, loan payments, and salaried payroll. Selecting an adequate coverage period is critical. Most businesses choose 6-12 months, but some industries like manufacturing or restaurants may need 12-18 months to fully recover after a significant loss. This coverage is typically added to a commercial property policy or BOP rather than purchased standalone. Premiums are generally 1-1.5% of the total coverage amount annually.
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Frequently Asked Questions
How is business income calculated for insurance purposes?
Business income is typically defined as net profit plus continuing normal operating expenses (like rent and payroll) that continue even when the business is closed. Your insurer will review financial records to determine the proper coverage amount.
What is extra expense coverage?
Extra expense coverage pays for costs above your normal expenses that help you continue operating after a covered loss — like renting temporary space or expediting equipment replacement. It works alongside business income coverage.
What is an indemnity period?
The indemnity period is the maximum time your business income policy will pay benefits. It runs from the date of the covered loss until your business is restored, up to the policy's maximum indemnity period (e.g., 12 months).
Does business income insurance cover supply chain disruptions?
Standard policies do not. Contingent business interruption coverage can be added to cover losses resulting from disruptions at a key supplier or customer's location, though this coverage is becoming more restrictive and expensive.
How do I determine the right coverage period?
Consider how long it would realistically take to rebuild your location, replace equipment, obtain permits, and return to pre-loss revenue levels. Conservative estimates are better — under-insuring this risk leaves your business exposed when it is most vulnerable.
Results are estimates only. Actual premiums depend on underwriting factors specific to your business. Consult a licensed insurance professional for an accurate quote.
How to Use This Calculator
- Enter your details — Fill in the required fields above with your personal or policy information. The more accurate your inputs, the better your estimate.
- Review your results — Your estimate appears instantly as you complete the form. Check the breakdown to understand how each factor affects your numbers.
- Compare and take action — Use the results to compare options, discuss with your insurance agent, or make informed decisions about your coverage needs.
Common Use Cases
- Shopping for a new policy — Get a baseline estimate before requesting quotes from multiple insurers so you know what to expect and can negotiate effectively.
- Reviewing coverage at renewal — Compare your current costs against what this calculator suggests to identify potential savings or coverage gaps before your policy renews.
- Financial planning and budgeting — Factor insurance costs into your monthly budget or long-term financial plan with realistic estimates rather than guesswork.