To protect the firm against the loss of earnings if the business operations are disrupted due to fire,accident,or some other insured peril,a firm would purchase:
A)property insurance.
B)key personnel insurance.
C)business liability insurance.
D)business interruption insurance.
E)damage insurance.

Question

Quizplus · Accepted Answer

Business interruption insurance is designed to protect the firm against the loss of earnings if business operations are disrupted due to a covered peril, such as fire or accident. This insurance covers the cost of ongoing expenses and lost profits during the period of interruption.

The other options (A) property insurance, (B) key personnel insurance, (C) business liability insurance, and (E) damage insurance, do not specifically address the loss of earnings due to business interruption. Property insurance and damage insurance may cover the physical damage caused by the peril, but do not cover the ongoing expenses and lost profits. Key personnel insurance covers the loss of key employees, while business liability insurance covers liability claims against the firm.

To Protect the Firm Against the Loss of Earnings If