Business Interruption Insurance Ottawa

If the ice storms of the Ottawa Valley have taught us anything, it is that business as usual can stop in an instant. For business owners in the Ottawa region, physically repairing a building is often just the first step. The bigger challenge is surviving the weeks or months of lost revenue while the repairs take place.

At Oegema, Nicholson & Associates, we have been serving Ottawa and surrounding communities since 1961. We know that your business is more than just bricks and mortar; it’s your livelihood. While standard property insurance rebuilds your walls, business interruption insurance (often called Business Income coverage) is designed to protect your balance sheet.

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What Is Business Interruption Insurance?

Business interruption (BI) insurance is coverage that replaces your lost net income and pays for continuing operating expenses (like rent, payroll, and taxes) during a forced closure.

Crucially, this coverage is triggered only when your business suffers direct physical loss or damage from a covered peril, such as a fire, windstorm, or vandalism. Think of it as “disability insurance” for your business, ensuring that a temporary closure doesn’t become a permanent failure.

The "Physical Damage" Trigger: A Crucial Distinction

One of the most common misconceptions we see at ONA is the belief that business interruption insurance covers any loss of revenue. It does not. To trigger coverage, there must generally be direct physical loss or damage to your insured property.

Scenario A (Covered): A fire damages your kitchen in Manotick. You cannot cook, so you lose revenue. The physical damage triggers the policy.
Scenario B (Not Covered): A global pandemic mandates a lockdown, but your kitchen is physically untouched. This is typically not covered.

Recent legal precedents in Ontario (such as SIR Corp v. Aviva) have reinforced that government orders or “loss of use” without physical alteration to the property do not trigger standard policies.

At ONA, we help you understand this difference, build a comprehensive coverage plan, and manage claims. Our goal is to advocate for your business and create a realistic, proactive risk management strategy.

Gross Earnings vs. Profits Form: Which Is Right for You?

Not all Business Interruption policies are created equal. In Canada, there are two primary forms of coverage. Choosing the wrong one can leave you exposed during the critical ramp-up period after you reopen.

The profits form is widely recommended for Ottawa businesses because it pays until your revenue returns to normal levels, not just until the repairs are finished.

Gross Earnings Form (Standard)

Duration: Ends immediately when the building is repaired or replaced.
Market Share: Not covered. If customers went to a competitor during repairs, you bear that loss.
Best For: Businesses where customers return instantly (e.g., a gas station).

Profits Form (Recommended)

Duration: Continues until financial results return to pre-loss levels (up to the indemnity limit).
Market Share: Covered. It pays for the ramp-up time needed to win customers back.
Best For: Businesses relying on client loyalty or contracts (e.g., Law Firms, Manufacturers, Retail).

As independent brokers, we work for you, not the insurance companies. We can help you navigate these complex wordings to ensure you aren’t left unprotected.

Local Risks: Why Ottawa Businesses Need Specific Extensions

Operating in Eastern Ontario comes with a unique set of risks. A standard “off-the-shelf” policy may leave gaps regarding our specific weather and infrastructure challenges.

1. Supply Chain Delays & Contingent Business Interruption

If you rely on specialized equipment or stock, a 12-month timeline may no longer be sufficient. Furthermore, what happens if your supplier has a fire?

Contingent Business Interruption (CBI) insurance can be added for coverage in situations like this. This extension covers your lost income if a key supplier or customer suffers physical damage that impacts your ability to do business.

2. The Indemnity Period

The indemnity period is the maximum length of time the insurer will pay benefits after a loss.

With supply chain fractures, it can take 12–18 months just to get replacement machinery. We often recommend extending your indemnity period to 18 or 24 months to account for these delays and Ottawa’s permitting timelines.

At Oegema, Nicholson & Associates, our decades of local experience mean we understand the specific risks Ottawa businesses face. We know where coverage gaps commonly occur and how to close them.

The Coinsurance Trap: Are You Underinsured?

Inflation has driven up the cost of goods and services significantly. If your business Interruption limit is based on your revenue numbers from three years ago, you may face a “Coinsurance Penalty.”

Most business interruption insurance policies require you to insure 100% of your gross profit. If you under-report your profit to save on premiums, the insurer can penalize you during a claim, paying only a fraction of your loss. We conduct annual reviews to help ensure your reported values match your actual growth, so you aren’t caught off guard.

Frequently Asked Questions

What does business interruption insurance cover?

It covers the net income (profit) you would have earned had the loss not occurred, plus continuing operating expenses such as mortgage/rent, payroll, taxes, and insurance premiums. It ensures your business survives financially while physical repairs are being made.

What does contingent business interruption insurance mean?

Contingent Business Interruption (CBI) extends coverage to income losses resulting from property damage at a location you do not own, typically a key supplier (who can’t ship you goods) or a major customer (who can’t buy your goods). It effectively protects your supply chain.

What is the business interruption insurance indemnity period?

The Indemnity Period is the specific duration of time during which the insurance policy will pay for lost income. This period begins on the date of the loss and ends either when the period expires (e.g., 12, 18, or 24 months) or when the business returns to pre-loss financial standing (under the Profits Form), whichever comes first.

Protecting What You Have Built

Building a business takes grit, especially when navigating the economic shifts we’ve seen across Ontario. You handle the growth; let us handle the safety net. You shouldn’t have to worry that a single storm or accident could erase years of hard work.

At Oegema, Nicholson & Associates, we are real people offering real advice. We shop the market on your behalf, checking with major insurers like Intact, Aviva, and Gore, to find the comprehensive coverage you need at a competitive rate.

Is your current policy ready for the next storm?

What Our Clients Are Saying

Real stories from people who trust
Oegema, Nicholson & Associates Insurance

“One call to Oegema, Nicholson & Associates is all it took. After our basement flooded, within a day or two they had a crew cleaning everything up, taking down the drywall and itemizing everything to be cleaned, thrown out or restored. They had everything in place for us in a timely manner and were extremely patient with me as they talked me through the process and waited for me to make decisions.”

Jennifer Parks, Stittsville, Ontario

“I’ve been dealing with ONA for over 20 years with my personal insurance, as well as our commercial insurance, and I know I can rely on them for great customer service, and prompt responses. I feel confident not only referring them to my employees, but to our customers as well.”

Charlene Brunet, Butler Group of Company

“ONA helps me with my personal insurance and my business insurance. They are my one stop shop when it comes to insurance and group benefits. I know I’m covered in all areas. Great friendly service and knowledgeable staff!”

James Carriveau, President, Exact Interlock and Exact Properties

“It’s always a pleasure to deal with Oegema, Nicholson & Associates, and I can depend on them for all my insurance needs. I have been a client for several years and whether it’s regarding my personal insurance, or anything to do with our employee benefits or commercial needs, I know I’m taken care of.”

Rhonda, Capital Dodge

“I would like to thank Carol for everything she has done for me and my family over the years. It is my honest belief that we would not be in the position we are in if it was not for her guidance, expertise and honesty. We can’t begin to thank her enough.”