Use And Occupancy Insurance

What Does Use And Occupancy Insurance Mean?

Use and occupancy insurance is an outdated term for a type of business insurance that covers financial losses, such as lost profits and additional expenses, resulting from a disaster—such as a fire—that halts business operations. This insurance could include coverage for business income, property loss, property replacement, and other related expenses.

Today, it is commonly referred to as business interruption insurance or business income insurance. It is one of several types of business insurance that owners purchase alongside general liability and commercial property policies.

Insuranceopedia Explains Use And Occupancy Insurance

For example, if a fire destroys essential equipment for a tree removal company, it would lead to property loss, repair or replacement costs, lost profits due to service interruption, and other related complications. Business interruption insurance would cover these expenses and help protect the company from significant financial losses. However, this coverage may not apply if the fire was caused by the fault of an employee or due to a hazardous condition.

The cost of adding business interruption coverage depends on the size of the operation and the industry it falls in. You can get a rough idea of what to expect by looking at how much small business insurance costs on average.