Business Income Information: Introductory History and Development

Summary: Insurance protection for loss of business earnings due to physical damage has undergone a gradual but steady evolution over the years. Not only has there been many changes in the provisions of coverage, it has also gone through several name changes since the first time element coverage was written over a century ago. Known as “use and occupancy” insurance in its early days (a term that survived in boiler and machinery insurance until the late 1970s), the name for fire insurance, was changed to “business interruption” insurance in the 1940s. This name, in turn, was replaced under the Insurance Services Office (ISO) simplified commercial property program by the term “business income” insurance. The 2012 edition of the ISO form is discussed subsequently in this section.

These discussions offer some basic information on business income insurance with a brief description of various forms that have figured in its evolutionary history.

Topics covered:

Development of forms

What is covered?

When coverage applies

Extra expense

Extended loss after operations resume

Blanket coverage