Updated November 18, 2019

Our insured had total fire loss and is insured under a Businessowners policy. The insured is a dentist and determined that as of this loss she would abandon this practice as she had other locations that were more productive.

Since there was a direct loss from a covered peril, but no period of restoration to speak of, will the insured recover any policy proceeds under business income coverage?

Iowa Subscriber

In order for business income coverage to be triggered, the insured must suffer an actual loss of business income due to the necessary suspension of operations during the period of restoration. If the dentist is not continuing the business at that location, and it is not going to be repaired or replaced, you are correct that there is no period of restoration, and there is also no loss of income due to suspension of operations. However, under the Loss Conditions of the coverage form, paragraph d. of Loss Determination provides as follows: d. If you do not resume "operations", or do not resume "operations" as quickly as possible, we will pay based on the length of time it would have taken to resume "operations" as quickly as possible.