Our insured has a large $2 million property deductible. However the period of restoration begins immediately after the loss. Must the insured prove that the deductible for direct damage will be exceeded, before the carrier will pay for the loss of business income?

Kentucky Subscriber

Generally, business income policies do not require that the property deductible be exceeded in order to be triggered. BI policies often have a time deductible—usually seventy-two hours—before they kick in, but if the period of restoration on your policy begins immediately, then there is no time deductible either. As long as a the elements necessary to trigger the policy occur—direct physical damage that causes a suspension of operations during the period of restoration—then the $2 million property deductible would not have to be met.