When you’re running a business in Ontario, you think about sales, staffing, supply chains, and maybe even cybersecurity. But here’s something many owners don’t consider until it’s too late: what happens when your business can’t operate for days, weeks, or even months due to an unexpected event?
That’s exactly what business interruption insurance is designed for. It won’t prevent the damage, but it will help protect your bottom line when the worst happens.
In this article, we’ll explain what business interruption insurance is, how a business interruption policy works in Ontario, and why companies of all sizes, from local shops to manufacturing facilities, should seriously consider it. We’ll also walk through real examples, what the insurers we work with offer, and how Levitt Insurance can help you compare options and get the right coverage.
What is Business Interruption Insurance?
Let’s start with the basics. Business interruption insurance (also called business income insurance) covers your lost income and certain ongoing expenses when your operations are halted due to an insured event, like a fire, flood, or equipment failure.
Here’s the key: it doesn’t cover the physical damage itself. That’s what property or commercial general insurance is for. Instead, business interruption coverage kicks in to help you stay financially afloat during the downtime.
In Ontario, most insurers will only approve a claim if:
- The event is listed in your commercial property or package policy (known as a “named peril”)
- There is a direct physical loss that leads to the interruption
- The income loss is provable and occurred within a reasonable recovery period
What Does a Business Interruption Policy Typically Cover?
A standard business interruption policy in Ontario may include:
- Lost net income you would have earned during the closure
- Fixed operating expenses like rent, salaries, and loan payments
- Relocation costs (if you move to a temporary location to continue operating)
- Training costs for employees learning new equipment (if replacements were needed)
- Taxes and loan repayments due during the closure period
But policies vary by insurer, and this is where a broker can really help.
Real Example: Business Interruption After a Fire in Ontario
Let’s say you run a retail store in Vaughan. One night, a fire starts in a neighboring unit and spreads into your space. Even though your own inventory isn’t completely destroyed, the smoke damage is extensive and you can’t reopen for two months.
Your commercial general insurance policy covers the repairs, but what about the two months of lost sales? That’s where your business interruption insurance comes in.
If your policy was set up properly, you’d receive:
- The equivalent of your average monthly income
- Coverage for your rent and wages during the downtime
- Any extra costs for advertising your reopening
This kind of recovery can make the difference between restarting operations or shutting down permanently.
How Long Does It Cover You For?
Most business interruption policies include:
- A waiting period (usually 24 to 72 hours)
- A restoration period (typically capped at 12 months, but sometimes longer)
In Ontario, insurers are regulated by FSRA (Financial Services Regulatory Authority of Ontario), and business interruption coverage must comply with Canadian standards. That includes clear policy wording, accurate financial documentation, and transparent claim procedures.
What About Pandemic Closures?
Many Ontario business owners learned about business interruption insurance the hard way during COVID-19,when they discovered their policies didn’t cover virus-related closures.
Most business interruption coverage still requires physical damage to property. While some insurers are exploring broader coverage options post-pandemic, it’s not yet common practice in Canada.
That’s why it’s important to understand what your policy does and doesn’t include. And why working with an insurance broker,not just an insurance company,is so important.
Specialized Support for Business Owners
At Levitt Insurance, we work with a wide range of insurers, including Chubb Insurance, Economical Insurance, Travelers Insurance and others. These are national or international players, all very respected in the insurance world.
They offer tailored business interruption coverage for industries like:
- Manufacturing – covering production halts, supply chain disruptions, and machinery breakdowns
- Professional Services – helping firms retain talent and cover lease expenses even when offices can’t open
- Retail and Hospitality – insuring against closures due to fire, storm, or property damage
Their business interruption coverage is often part of a broader commercial general insurance package that includes property, liability, and specialty coverage.
Policies are customizable, and claims service is top-tier, which matters a lot when you’re under pressure.
Why Use a Broker Like Levitt Insurance Instead of Going Direct?
You could call direct insurers and ask for a quote. But here’s the catch: each one will only show you their product because direct insurers only have one product to sell.
As brokers, we work for you, not the insurance company, and we work with many insurance companies to give you the options that are best for you Our job is to:
- Understand your unique business risks
- Compare policies from multiple top-tier insurers
- Break down the fine print in plain English
- Negotiate better pricing and terms on your behalf
And when something goes wrong, we help you through the claims process, step by step.
Do You Really Need Business Interruption Insurance?
If you’re asking the question, the answer is probably yes. If any of these apply to your Ontario-based business, you should seriously consider it:
- You rely on a physical location to operate (store, office, warehouse)
- You’d struggle to cover fixed expenses during a closure
- You have employees or suppliers counting on your operation
- You’re in an industry where even short disruptions hurt revenue
In other words, if you can’t afford to stop working, you can’t afford to go without coverage.
Business interruption insurance isn’t the most exciting topic, but it might be the most important coverage your company has. When disaster strikes, it’s not enough to rebuild,you need the cash flow to survive the downtime.
If you’re not sure whether your current policy includes business interruption,or if you want to explore what other top providers can offer, let’s talk.
At Levitt Insurance, we help business owners across Ontario find tailored, transparent insurance solutions that protect what you’ve worked so hard to build.
Whether you need business interruption, commercial general insurance, or both we’ll help you compare options from trusted providers like Chubb Insurance, Intact Insurance, Aviva Insurance, Economical Insurance and more. We are here to find the best rates for your situation.
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