Which insurance policy would cover revenue losses during a closed week due to a flood?

• A. Commercial property insurance
• B. Homeowners insurance
• C. Business income insurance
• D. Flood-specific riders

Answer: (C)

The main idea here is how a business recovers financially when its operations are shut down by a covered peril. Business income insurance is designed to step in when a flood forces a business to suspend operations. It helps replace the money the business would have earned and covers ongoing expenses during the period of restoration, up to the policy limits. In a scenario where the business is closed for a week because of flood damage, this coverage directly addresses the revenue shortfall and helps the business survive the interruption.

Commercial property insurance mostly covers physical damage to property, not the ongoing income a business loses while it’s closed. Homeowners insurance isn’t intended for business losses at all. Flood-specific riders focus on damage to insured property from flood, not the broader loss of income from a temporary shutdown unless they’re paired with a business interruption endorsement. So the best fit for covering revenue losses during the closed week is business income insurance, which is specifically designed to protect the earnings stream during the interruption caused by a covered peril.