Business interruption insurance pays ongoing business costs when an insured event interrupts a small business, such as fire damaging business property. It answers a different loss from building and contents insurance, which covers damage or loss to the building and contents from events including fire. The official guidance states no standard dollar amount or payment period (figures checked 1 October 2026), so the policy’s PDS should be checked.
What does business interruption insurance cover after a fire?
The official example is straightforward: fire damages business property, interrupts operations, and business interruption insurance responds to qualifying ongoing business costs.
That does not mean every cost is automatically covered. The official guidance does not list individual cost categories, standard benefit limits, excesses, waiting periods or time limits. Those details depend on the policy wording, so the PDS is the starting point—not the policy’s headline description alone.
Is it the same as building and contents insurance?
They respond to different parts of the loss:
| What happened? | Relevant type of cover | Fire example |
|---|---|---|
| The building or its contents are damaged or lost | Building and contents insurance | Damage to the business property |
| An insured event interrupts the business | Business interruption insurance | Qualifying ongoing business costs following the interruption |
A fire could potentially involve both types of cover. Building and contents insurance addresses the damage or loss to the property; business interruption insurance addresses the ongoing business costs associated with the insured interruption. One does not replace the other.
What should I check in the policy’s PDS?
Read the Product Disclosure Statement and ask:
- Is fire covered as an insured event?
- Must the fire directly prevent the business from operating?
- Which ongoing business costs are included?
- Are any costs specifically excluded?
- Is there a waiting period before cover applies?
- How long can the policy respond to the interruption?
- What benefit limit, excess or other conditions apply?
The official business.gov.au guidance does not state standard answers to these questions. Do not assume a standard dollar amount or payment period.
Is business interruption insurance required for every small business?
Insurance requirements depend on the type of business. A business may need insurance because of law, or because the people it deals with require it. The official guidance does not identify business interruption insurance as a requirement for every small business.
Check the relevant regulator page and any requirement imposed by a client or another party you deal with. If it is unclear which laws apply to the business, seek professional advice about legally required insurance.
When comparing options, business.gov.au says an authorised general insurer can be found on the Australian Prudential Regulation Authority’s register. An insurance broker’s licence can be checked on the Australian Securities and Investments Commission’s professional register.
Who can help you assess the policy?
Discuss the options with a licenced insurance broker, authorised insurer or business adviser. Ask them to explain the insured events, covered ongoing costs, exclusions, limits and any time period in the proposed policy.
This is general information, not financial or legal advice. Check the applicable regulator guidance and your policy’s PDS before deciding.
Sources
- Types of business insurance | business.gov.au — figures checked 1 October 2026.
FAQ
Does business interruption insurance pay for the fire damage itself?
Not as its main purpose. It pays qualifying ongoing business costs when an insured event interrupts the business. Building and contents insurance is the type that covers damage or loss to the building and contents from events including fire.
Does a fire automatically trigger business interruption cover?
Fire is the example used in the official guidance, but the event and resulting interruption must be insured under the policy. Check the PDS for the definition of an insured event and the circumstances that trigger cover.
How much will business interruption insurance pay?
The official guidance does not provide a standard dollar amount or payment period. The policy’s covered costs, limits, excess, waiting period and duration of cover determine the response.
Is business interruption insurance compulsory?
The official guidance does not state that it is compulsory for every small business. Requirements depend on the business type and may arise from law or from people the business deals with, so check the relevant regulator page and seek advice if necessary.
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