business disruption

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Income Loss Due to Actions of Civil Authority

Roger Hillman writes about business disruption due to terrorism, peaceful public demonstrations, “Acts of God,” riots, and even ordinary road closures.

Coverage for income loss, also referred to as business interruption, is commonly found in Commercial Property and Business Owners’ policies.  This provides coverage for loss of income as a result of the insured’s suspension of operations.  The most frequent triggering event for such coverage is physical damage to the business premises necessitating a closure for repair, rebuilding, or even relocation. 

       However, a unique aspect of business interruption coverage is income loss due to actions of civil authority.  Such actions include something as minor as a road closure for repairs or as significant as an act of terrorism.  In order to invoke such coverage, the prevention or interruption of access to the insured premises, absent physical damage to the insured premises itself, must be the result of physical loss or damage to property away from the insured property as a result of an insured peril.