Period of restoration

The period of restoration is the window during which business income insurance replaces the income you lose after covered property damage. It sets when payments start and when they stop. It’s the core of any business interruptionBusiness interruptionBusiness interruption insurance replaces income you lose, and helps pay ongoing expenses, when covered physical damage forces your business to close or slow down.Read the definition claim.

When it starts and ends

In standard business income forms, the period of restoration for lost income begins after a waiting periodWaiting periodA waiting period is the stretch of time after a covered loss before coverage, such as business income, starts paying, working like a deductible measured in hours or days.Read the definition, often 72 hours after the damage. For extra expenseExtra expenseExtra expense coverage helps pay the reasonable added costs of staying open or reopening sooner after covered property damage, such as renting a temporary space.Read the definition, the costs of reopening sooner, it often begins right away.

It ends on the earlier of two dates:

• the date the damaged property should be repaired, rebuilt or replaced with reasonable speed and similar quality, or
• the date you resume business at a new permanent location.

The key word is “should.” The period is based on how long repairs reasonably ought to take, not how long they actually take. If repairs drag on because of your own delays, coverage may end before you reopen. Payments are also capped by your policy’s limit, which may be set in dollars or months.

An example

What happens after you reopen

Customers don’t always come back the day you open the doors. Many business income forms include a short extension that keeps paying for a limited time after repairs are done while sales recover, and some let you choose a longer one, often called an extended period of indemnity. Check how long yours lasts.