Western Governors University (WGU) BUS2060 D078 Business Environment Applications I: Business Structures and Legal Environment Pre-assesment Practice Exam

Business interruption insurance specifically protects against income loss resulting from unexpected disruptions in business operations. This type of insurance is designed to cover the loss of income that a business might experience during the period of disruption, allowing the business to maintain financial stability despite reduced operations. Such interruptions can be caused by various unforeseen events, such as natural disasters, fires, or other incidents that force a business to halt operations temporarily.

By providing coverage for lost revenue during these periods, business interruption insurance helps the business cover ongoing expenses, such as rent, utilities, and payroll, ensuring that the company can recover and continue its operations once the disruption has been resolved. This form of insurance is crucial for businesses that rely heavily on steady cash flow to maintain their operations and meet their liabilities.