Business Interruption Runway

Step by step

1. Monthly burn = continuing payroll + other fixed costs + lost net profit.
2. Months covered = business interruption limit ÷ monthly burn, shown to one decimal place.
3. Months short = months to reopen minus months covered, never below zero.
4. Cost beyond the limit = (months to reopen × monthly burn) − the limit, never below zero. It is computed from the exact figures, not the rounded months, so the two agree to the dollar.
5. A limit of zero is read as "not stated" — common where a policy provides business income on an actual-loss-sustained basis with no dollar limit — and no runway is illustrated.
6. With no monthly burn entered there is nothing to divide by, so no runway is illustrated rather than an invented one.
7. The waiting period and restoration-period cap are shown as context rather than applied to the arithmetic, because both vary by form.

The formula

Months covered = BI limit ÷ (payroll + fixed costs + net profit). Shortfall = max(0, months to reopen × monthly burn − BI limit).

Assumptions and their default values

Some of these change with the state you select.

Important disclosures

1. This tool is educational only. It illustrates potential exposure using the assumptions shown — it is not insurance advice, a price, or an offer of coverage, and it does not determine whether any coverage amount is right for you. Policy language varies; review your actual policy and discuss your situation with a licensed insurance professional.
2. Business interruption coverage responds only when the interruption follows a loss the policy covers. A closure from an excluded cause is outside it regardless of the limit carried.
3. Many business owner policies provide business income on an actual-loss-sustained basis — typically for 12 months — with no dollar limit on the declarations. Where that applies, the runway is set by that period rather than by a figure, and a limit of zero here is read as "not stated", not as no coverage.
4. Most forms carry a waiting period before anything is payable, and many carry a restoration-period cap expressed in months that applies independently of the dollar limit. Either can end a claim before the money runs out.
5. How business income is calculated at claim time is defined by the policy wording and supported by your financial records. The monthly burn entered here is an illustration, not a claim calculation.
6. Extra expense, contingent business interruption for supplier or customer losses, and civil-authority coverage are separate provisions not modelled here.