Business Interruption Insurance: Does It Cover Loss of Business Due to Power Outage? 

Unexpected disruptions can have a significant impact on your business’s bottom line. In Texas, where severe weather and grid issues can lead to power outages, many business owners may wonder if their business interruption insurance will help cover lost income due to such issues.

What is Business Interruption Insurance?

Business interruption insurance is designed to help businesses recover lost income and cover ongoing expenses if operations are halted due to a covered event. This coverage is often part of a commercial property or business owner’s policy. It can help pay for things like rent, payroll, and other fixed costs while your business is unable to operate.

Does Business Interruption Insurance Cover Power Outages?

Coverage for power outages under business interruption insurance can be complex. In general, most policies require that the interruption be caused by direct physical damage to your property from a covered peril, such as fire or storm damage. If a power outage is caused by damage to your building, including if a storm damages your systems, your policy may provide coverage for lost income.

However, if the outage is due to damage to the power grid or utility lines away from your property, standard business interruption insurance typically does not apply. Some insurers offer utility service interruption coverage, which can extend financial protection to losses caused by utility failures outside your premises. It’s important to review your policy details and discuss available options with an experienced agent.

Why Texas Business Owners Should Review Their Coverage

Texas businesses face many risks, from hurricanes to extreme heat and grid instability. Understanding the specifics of your business interruption insurance is essential to establish and maintain financial security against the types of power outages most likely to affect your operations.

How Our Team Can Help

At American Reliable Insurance Agency, we take pride in helping business owners evaluate their risks and select commercial insurance solutions tailored to their needs. Our team can assess your situation, identify coverage options for power outages and recommend appropriate solutions.

Contact us today to learn more or get a free quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.