DEFINITION of 'Business Continuation Insurance'

Life insurance that a company or firm purchases to provide the funds necessary to continue business and cover the losses incurred in the event of the untimely death or disablement of someone critical to the business. This may be an owner, partner, or other employee without whom the business may cease to operate.



BREAKING DOWN 'Business Continuation Insurance'

The two most common types of business continuation insurance policies are entity purchases and cross purchases. Entity purchase policies involve the business itself being named as the owner and beneficiary of the insurance policy. Cross purchase policies mean that the individual owners of the business are named the beneficiaries for policies that cover their partners and/or co-owners.



RELATED TERMS
  1. Extra Expense Insurance

    Insurance coverage that provides funds for reasonable and necessary ...
  2. Key Person Insurance

    A life insurance policy that a company purchases on a key executive's ...
  3. Business Owner Policy - BOP

    Insurance policies that combine protection from all major property ...
  4. Life Insurance

    A protection against the loss of income that would result if ...
  5. Cover Note

    A temporary document issued by an insurance company that provides ...
  6. Insurable Interest

    An economic stake in an event for which an insurance policy is ...
Related Articles
  1. Insurance

    Will Insurance Keep Your Business Safe?

    Skilled employees are key to a successful business. Find out how to avoid a financial setback if they leave.
  2. Small Business

    Using Life Insurance as a Business Succession Plan

    Life insurance can be a good succession plan tool for business partnerships.
  3. Financial Advisor

    How Life Insurance Can Help With Liquidity

    Life insurance can provide liquidity in personal and business situations when access to capital is essential. Learn how to utilize its unique properties.
  4. Small Business

    How To Create A Business Succession Plan

    Make sure the business you built continues to thrive long after you've left the helm.
  5. Financial Advisor

    Advising FAs: Explaining Life Insurance to a Client

    Life insurance was initially designed to protect the income of families, particularly young families in the wealth accumulation phase, in the event of the head of household's death.
  6. Financial Advisor

    Is Life Insurance From Your Employer Enough?

    Covering the needs of the ones you would leave behind is not easy. But efforts to secure a life insurance policy outside of work should pay off.
  7. Small Business

    Creating a Risk Management Plan for Your Small Business

    Learn how a complete risk management plan can minimize or eliminate your financial exposure through insurance and prevention solutions.
  8. Insurance

    How to Protect Your Income No Matter What

    What does it mean to insure your income? Here are a variety of ways to do it and some insights into when it might make sense to invest in income insurance.
  9. Small Business

    How to Reduce Risks In Small Business

    Small business owners have better tools to control risk than ever before, making the whole concept of running your own business a little less daunting.
RELATED FAQS
  1. Can I buy insurance to reduce unlimited liability in a partnership?

    Find out why it is important to safeguard your general partnership in the even that one member becomes disabled, dismembered ... Read Answer >>
  2. What are some examples of industries that practice price discrimination?

    Understand the various types of insurance coverage offered in the insurance marketplace, and learn why each policy should ... Read Answer >>
Hot Definitions
  1. Straddle

    An options strategy in which the investor holds a position in both a call and put with the same strike price and expiration ...
  2. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  3. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that eventually eliminated tariffs to encourage economic activity between the United ...
  4. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  5. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  6. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
Trading Center