⏳ Business Interruption: Waiting Periods & Indemnity Periods 🇨🇦
When fire, flood, or another insured event forces a business to pause operations, Business Interruption Insurance (BI) helps replace lost income and cover ongoing expenses. Yet two terms often misunderstood—Waiting Periods and Indemnity Periods—play a critical role in how claims are paid.
⚡ Waiting Periods
- Think of this as a deductible measured in time rather than money.
- BI coverage typically begins after a waiting period of 24, 48, or 72 hours.
- Losses incurred before the waiting period ends are not covered.
- Example: If a restaurant shuts down after a kitchen fire and the waiting period is 72 hours, only losses starting on Day 4 would be eligible for coverage.
📆 Indemnity Periods
- The length of time BI coverage will pay for losses after a covered event.
- Common options are 12, 18, or 24 months, but the right choice depends on how long it would realistically take to rebuild, restock, and restore operations.
- For industries with long lead times—such as manufacturing or construction—a longer indemnity period can be essential.
📌 Why It Matters in Canada
Recovery often takes longer than expected, especially with supply chain delays, rising construction costs, and labour shortages. Many businesses underestimate these timelines, leaving themselves underinsured. Choosing appropriate waiting and indemnity periods can be the difference between full recovery and exhausting coverage too soon.
✅ The Takeaway
Policy limits matter—but so do waiting and indemnity periods. Reviewing both ensures your BI insurance truly supports your business continuity.
👉 When was the last time you reviewed your BI policy?
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