When you can't trade, your bills don't stop. This is the cover that keeps paying them until you can.

Lost profit. This is your profit, not your revenue, and it is worked out the policy's way, not your tax return's (see Common Mistakes).

Fixed costs that don't stop. Rent, permanent staff wages, loan repayments, leased equipment, and anything else your business owes whether or not the doors are open.

Additional Increased Cost of Working (AICOW). The reasonable extra money you spend to get back to trading sooner, such as short-term premises, hired equipment or extra staff to clear a backlog. It pays even where what you spend is more than the income it saves. Without this section, a policy refunds extra costs only up to the income they protect. That punishes you for trying to recover fast. The business pack wordings we place include $25,000 of this as standard, checked as at July 2026. The limit can be increased where a real recovery plan needs more.

All three run for the indemnity period. That is the longest the policy keeps paying once a claim starts, not however long the disruption lasts.

Your rebuild finishing is not the same as your business recovering. The indemnity period keeps running while trade climbs back (see business interruption explained).

In a January 2026 determination by the Australian Financial Complaints Authority (AFCA), a cafe and catering business was hit by storm damage and closed within days. Its doors reopened five months later, but trade still had not recovered when the 12-month indemnity period on the policy ran out. So the insurer paid out for the full 12 months: $280,570 for lost gross profit plus $26,863 under the AICOW extension.

The declared gross profit sum insured fell short of the policy's test, so the payout was also reduced under its underinsurance clause. AFCA found the insurer had applied that clause correctly and handled the claim reasonably. The 12-month period itself was never in dispute.

When we set up or renew business interruption cover, we ask you for a copy of your most recent financial statements. That way, the figure on your policy comes from what your business actually earns, not a number remembered from a form filled in years ago.

Premium is the most common reason business owners push back on a longer period. For a trading business, the premium difference between periods is much bigger than on a building owner's loss of rent. That is why your period deserves a real conversation against your own recovery timeline before anyone settles on the minimum.

Before we quote anything, we check whether you're a tenant, an owner-occupier or a landlord.

• You lease your premises and trade a business from it. This policy is yours to hold. Your landlord's building insurance does nothing for your income if the building is damaged and you can't trade. See business owner-tenant insurance.
• You own the building your business trades from (owner-occupier). You likely need both this cover and loss of rent. Sometimes they go through two different entities, when the building sits in one structure (a company or an SMSF, for example) and the business trades through another. Getting the entities right matters as much as the cover itself. See owner-occupier insurance.
• You're a landlord and don't trade a business from the property yourself. You need loss of rent, not this policy. Loss of rent protects your rental income. See commercial landlord insurance.

Mistake 1: Using your accountant's gross profit, not the policy's. The policy's gross profit is built from your turnover, adjusted for stock movements, minus the costs that stop automatically when you stop trading. If you declare too low a figure, or guess, the same underinsurance penalty applies as on a building sum insured. A partial disruption claim is cut in proportion to the shortfall, and a total shutdown is capped at the declared figure.

In a February 2025 determination, a Sydney hairdressing salon had split into two entities. In a phone call to the insurer, it then reduced its declared gross profit figure from $350,000 to $150,000. The correct insurable value of its gross profit was later assessed at $1,151,905. It claimed across four separate pandemic closure periods, covered under that policy's disease extension rather than its base physical damage cover. The assessed loss came to $672,769. The underinsurance clause cut the payout to $143,512.

Your defence is a figure worked out on a business interruption calculator against your GST-exclusive BAS figures, not a guess. A properly calculated figure gives the underinsurance clause far less to work with.

Mistake 2: Settling for the 18-month minimum. Eighteen months is the shortest period we place. It assumes your business is back to full trading by then. A longer period means a better position at claim time.

Mistake 3: Skipping or not understanding AICOW. It gets left off because nobody explained what it does.

Mistake 4: Assuming this is the same as loss of rent. A tenant needs business interruption. A landlord needs loss of rent. Having one does not mean the other exists.