In one sentence
Coverage replacing lost income when a property cannot operate after a covered loss, protecting debt service.
The longer version
Business income, or rent loss, coverage keeps cash flowing to service the loan when a fire or storm shuts a property down. Lenders require it because their repayment depends on the property's income.
The coverage period and amount are checked against the loan's needs, part of the insurance review package.
Common questions
- What is business income insurance?
- Coverage that replaces lost income when a property cannot operate after a covered loss, sometimes called rent loss coverage for income property.
- Why do lenders require business income coverage?
- Because debt service continues after a fire or storm even when rent stops. The coverage keeps the loan current while the property is rebuilt.
- How much business income coverage do lenders require?
- Often a set number of months of income, commonly twelve or more, depending on how long rebuilding would take.
Keep reading
- The due diligence checklist, built to be runChecklists as systems, not documents.
- The commercial loan closing checklistWhat goes on the list and who owns each line.
- The post-closing audit trailWhat examiners ask for and how to have it ready.
- Commercial loan softwareWhere this sits in the lending stack.