Written by: Lindsey Lessard, Vice President of NEXO Insurance, Broker Representative for Alternative Balance
Business Income and Extra Expense (“BI&EE”) coverage is an incredibly valuable part of your Alternative Balance property insurance policy, especially if your work is impacted by an unexpected event. But while this coverage is designed to help you recover lost income and pay necessary costs to keep your business going, it doesn’t apply in every situation, and knowing where the limits are is just as important as knowing what’s protected.
When It Works
BI&EE coverage is triggered when there’s direct physical loss or damage to your covered business personal property, like a fire, burst pipe, or theft of your business property. In these cases, if the damage causes your operations to temporarily shut down or slow significantly, your policy can help cover:
- Lost income based on your historical financials
- Payroll, rent, and other continuing expenses
- Additional costs like renting equipment or space to keep your business running
This benefit kicks in after a 72-hour waiting period and continues until the damaged property is repaired or replaced, or you’re back in business.
When It Doesn’t Work
Not every disruption qualifies. BI&EE does not apply if there has been no physical property damage even if your business has been interrupted by another cause. Damage to your business personal property (not the physical building structure) is the key trigger for BI&EE.
For example, if a water main break causes the city to close your street for repairs, and you can’t access your studio or office for a few days, then your policy wouldn’t respond. That’s because there’s no direct physical loss to trigger coverage. Unless there has been physical damage to your business property, business income coverage does not apply.
Other scenarios NOT covered include power outages, road closures, severe weather that doesn’t cause damage to your equipment, and neighboring property issues.
Planning Beyond the Basics
BI&EE is designed to respond to tangible, physical disruptions, not general inconvenience or access issues. If your business faces unique risks, like power loss, street closures, or dependency on nearby locations, coverage would not apply.
Still unsure if you’re covered for a specific situation? Don’t guess—just ask. We’re here to make insurance easy to understand.
Contact Us
If you have additional questions, please email us at [email protected] or give us a ring at (800) 871-3848 Monday-Friday 9am-5pm EST.
Want more insurance tips and information? Check out our other monthly insurance blog posts! New posts are uploaded during the first week of every month. If there are any specific topics that you’d like us to touch on, please shoot us an email at [email protected]!
