Which type of insurance is typically needed for protecting against lost rental income?

Business interruption insurance is specifically designed to cover lost income that a business suffers during a period of restoration after a covered loss. This type of insurance is essential for property owners and landlords because it helps to safeguard against the financial impact of losing rental income when the property becomes uninhabitable due to an insured event, such as a fire or severe weather damage.

When an insured event occurs, the property may require repairs, which can lead to a temporary loss of rental income. Business interruption insurance compensates the property owner for the lost income during the time it takes to restore the property, ensuring that they can cover ongoing expenses and maintain financial stability. This coverage is crucial for protecting the financial health of a rental property business, reinforcing its importance in such scenarios.

In contrast, liability insurance focuses on protection against claims of injury or damage that others may suffer due to conditions on the property, while property insurance generally covers the structure itself and its contents against risks like theft or damage, but does not directly address the income loss due to interruption of business operations. General liability insurance provides similar coverage to liability insurance, focusing on third-party claims rather than income protection.