What does business interruption insurance primarily cover?

Business interruption insurance is designed specifically to address the financial impact that a business faces when its operations are temporarily halted due to a covered event, such as a natural disaster or fire. This type of insurance covers the loss of income that the business would have earned had the interruption not occurred, along with expenses that continue even if the business is not operational, such as rent or salaries.

In the context of the options provided, the correct choice reflects how business interruption insurance supports businesses in maintaining their financial viability during periods of disruption. It does not cover physical loss of inventory or property damage directly, nor does it address legal expenses, which are outside the scope of what business interruption insurance typically includes. This focus on income loss and ongoing expenses is what distinguishes business interruption insurance from other types of coverage.