Running a business comes with many risks, but one of the most overlooked is what happens if your operations are forced to stop abruptly. A fire, storm, equipment failure, or even a power outage can halt your business for days or even weeks. It’s for these types of risks that we recommend business income insurance to our business clients. It’s not a luxury, it’s a critical layer of protection that can keep your business afloat when the unexpected hits.
Unexpected In Michigan
Not every type of sudden or adverse event qualifies for this type of insurance, but let’s go over some examples of ones that do. In Michigan, a number of these have led to business closures that would typically fall under business income insurance if the business had coverage for the cause of the interruption. In May 2024, a powerful tornado struck Portage, severely damaging a FedEx facility and other nearby businesses, halting operations for days and requiring significant cleanup and structural repairs before they could reopen.
In April 2025, flash flooding in downtown Plymouth caused extensive water damage to storefronts, forcing retailers and restaurants to shut down temporarily as they repaired interiors and replaced equipment. A fire in early 2023 gutted part of a commercial strip in Lansing, displacing multiple businesses and causing significant income loss during the rebuilding phase.
Even localized events, like the gas line explosion that forced the evacuation and closure of small businesses in Grand Rapids in 2022, can qualify, as long as there’s physical property damage or a mandated shutdown. Each of these incidents demonstrates how unpredictable disruptions can pause day-to-day operations, and how business income insurance can provide a crucial financial safety net during the downtime.
What Is Business Income Insurance?
Business income insurance (also known as business interruption insurance) covers lost income when your business can’t operate due to a covered loss, like a fire or natural disaster. It typically reimburses you for the net income your business would have earned during the shutdown period, along with ongoing expenses such as:
Employee payroll
Rent or lease payments
Loan payments
Taxes
Utility bills
This coverage is usually added to a commercial property or business owners policy (BOP) and activates when property damage triggers a shutdown of business operations.
Why Is It So Important?
Most business owners have property insurance to cover the physical damage to their buildings and equipment, but that is only so helpful if you can’t open your doors and generate revenue. Business income insurance bridges that gap, giving you the financial breathing room to recover without draining your cash reserves or going into debt.
Imagine a restaurant that suffers a kitchen fire. The property policy may cover the repairs, but without business income coverage, the owner still has to pay staff, rent, and suppliers without any money coming in. For small and midsize businesses, this kind of cash flow disruption can be devastating.
What’s Covered (And What’s Not)?
Typically Covered:
✔ Loss of income due to a covered event like a fire, windstorm, or vandalism
✔ Fixed operating expenses like payroll and rent
✔ Relocation costs if you must move to a temporary location to continue operating
✔ Extra expenses to keep the business running
Typically Not Covered:
✘ Income lost due to pandemics (unless explicitly added)
✘ Utilities and services not disrupted by the covered event
✘ Property damage itself (that’s handled by your property insurance)
Always read your policy carefully or work with an experienced agent to understand exactly what triggers your coverage and how long the benefits last (commonly referred to as the “restoration period”).
Industries That Benefit from Business Income Insurance
While almost any business can benefit, some industries are especially vulnerable to income loss:
Retailers and Restaurants: Heavy reliance on daily foot traffic
Manufacturers: Costly equipment breakdowns can stall production
Professional Offices: Law firms, accountants, or medical practices where service interruptions impact clients
Contractors and Service Providers: Dependent on specific tools, vehicles, or locations
If your business has a physical location or depends heavily on daily operations, business income insurance should be part of your risk management strategy.
How Can Business Owners Be Proactive about Risk?
Disasters don’t always come in the form you expect. Whether it’s a fire, a cyberattack, a power outage, or a government-mandated closure, not all interruptions will be covered by standard business income insurance.
That’s why it’s essential for business owners to have serious, proactive conversations with their insurance agent. Ask the hard questions:
What exactly counts as a “covered loss”?
How long would coverage last if my operations were interrupted?
Are there any gaps in my policy that could leave me vulnerable?
Are there endorsements or additional policies that could strengthen my protection?
Insurance isn’t one-size-fits-all. Your business is unique, and so are its risks. Reviewing your policy now can help you avoid costly surprises later. A trusted insurance advisor can help you build a more resilient plan tailored to the realities of your operation, so you’re ready for whatever comes next.
Don’t Let One Incident Derail Your Business
Your property insurance protects your physical assets. Business income insurance protects your future. As severe weather, cyber risks, and unexpected accidents become more common, smart business owners are adding this coverage to ensure continuity and peace of mind.
If you need help determining whether your business qualifies for business income insurance or how much coverage you might need, contact our Navisure Insurance team for a risk assessment and policy review. We're here to help you prepare for the unexpected - so you can keep your business moving forward, no matter what comes your way.
Frequently Asked Questions (FAQ) About Business Income Insurance
Q: What exactly does business income insurance cover?
A: Business income insurance covers the loss of income a business suffers when operations are suspended due to a covered event - like a fire, storm damage, or another physical loss. It typically reimburses lost net income, ongoing operating expenses (like payroll, rent, and utilities), and may include extra expenses to help you resume operations faster.
Q: What types of events qualify for a business income claim?
A: Covered events usually include physical damage from fires, storms, vandalism, or other property-related incidents that force your business to temporarily close. In some cases, government-ordered shutdowns due to these events may also qualify, depending on the policy language.
Q: Does business income insurance cover losses from supply chain disruptions or pandemics?
A: Generally, no. Most standard policies exclude losses not caused by direct physical damage to your property. That means supply chain delays, economic downturns, or pandemics are not covered unless you’ve purchased specialized endorsements or riders.
Q: How long will business income insurance pay out benefits?
A: Policies typically cover losses during the "restoration period,” the time it should reasonably take to repair or replace damaged property and resume operations. This period usually starts 72 hours after the loss and can last for up to 12 months or more, depending on your policy.
Q: Is business income insurance included in my current policy?
A: Not always. Some Business Owners Policies (BOPs) include it automatically, while others require you to add it as an endorsement. It’s important to review your policy or talk to your insurance agent to confirm whether you have this coverage and what it includes.
Q: What’s the difference between business income and extra expense coverage?
A: While business income insurance covers lost income and fixed costs, extra expense coverage reimburses additional costs you incur to minimize downtime, such as renting temporary office space or expedited shipping fees. Many businesses carry both for fuller protection.
Q: How much business income coverage do I need?
A: The right amount depends on your revenue, expenses, and how long it would take to recover from a loss. A trusted insurance advisor can help you estimate this based on your financials and risk profile.
If you still have questions or want to review your policy, our team is here to help. Business income insurance isn’t just a policy, it’s peace of mind when you need it most.
TROY VANDERMEER | VICE PRESIDENT
Troy attended Aquinas College in Grand Rapids, MI, and obtained a degree in Business and Technology. After graduating, he began his career as an insurance adjuster for a large-scale carrier. This included almost 10 years of experience, with roles such as property catastrophe, marine, and recreational vehicle claim handling. Troy learned the ins and outs of how insurance companies operate while also perfecting the technical aspects of the industry. This gives him an edge when working with clients regarding what coverage best fits their needs. As a proponent of leveraging technology, his goal is to simplify the process of getting insured without clients having to sacrifice their time.
In his spare time, Troy coaches high school soccer, enjoys golfing, fly fishing, and spending time with his family and friends.