Property repairs do not replace lost cash flow
After a fire or other insured property loss, rent, payroll, debt payments and other continuing expenses may remain even when sales stop. Business interruption insurance can address covered income loss during a defined recovery period. It is commonly connected to commercial property coverage rather than operating as a stand-alone answer to every shutdown.
The trigger is critical. Many forms require direct physical loss or damage caused by a peril insured under the property policy. A supplier failure, utility outage, evacuation order, cyber event or equipment failure may need a specific extension or separate policy.
Common coverage approaches
The Insurance Bureau of Canada describes gross earnings, profits and extra expense as common approaches. The actual policy may address:
- Lost business income or profit, calculated under the selected form
- Continuing expenses that do not stop during the interruption
- Extra expense to reduce downtime, such as temporary premises or rented equipment
- Payroll for all employees or selected employee groups
- Contingent interruption caused by damage at a named or qualifying supplier or customer
- Access, utility, equipment breakdown or other extensions when specifically included
Each item can have its own limit, waiting period, maximum period and trigger. A twelve-month period is not automatically adequate, and coverage does not necessarily continue until revenue returns to its pre-loss level.
Calculate the exposure with current financial information
Use recent statements, budgets and seasonality—not a rough revenue figure. Identify gross profit or earnings as defined by the proposed form, continuing and non-continuing expenses, ordinary payroll, peak inventory periods and expected growth. Your accountant can help prepare the figures, but the insurance definition still needs to be matched to the calculation.
Estimate how long it would take to investigate the loss, obtain permits, rebuild, replace specialized equipment, restore systems and win customers back. Review this alongside commercial property insurance and equipment breakdown coverage.
Test the continuity assumptions
Document alternate locations, remote-work capacity, backup suppliers, critical utilities, data restoration and communication responsibilities. These controls may reduce the loss, but they do not automatically create insurance coverage.
Ask for a coverage map, not one headline limit
Contact Westoak with current financials, locations, dependencies and recovery estimates. We can help compare the available triggers, calculation methods, sublimits and periods so the selected form reflects how the business would actually recover.