Business interruption insurance, also known as business income insurance, covers the loss of income that a business suffers after a disaster while operations are shut down.   A California property insurance policy will cover the physical damage to the   business, but not the income lost or the extra costs incurred due to the disaster.  Business interruption insurance can be added on to the business' California property insurance policy and is intended to replace lost income and put a business in the same position as it would have been had the disaster not occurred.

 The types of losses that that a business interruption policy typically covers are profits that would have been earned, fixed operating costs, the expense of operating at a temporary location, and expediting replacement equipment if needed.  To be covered, the damage must have been caused by an incident covered in the policy as a "named peril".  If the policy is an "all perils" policy, all disruptive incidents covered and any uninsured incidents will be listed on the policy. 

 If your business suffers a disaster, make sure to notify your insurance company as quickly as possible.  If a business makes a best effort to mitigate losses and presents a well documented case, it will make the claims process move along much faster.  Start gathering information such as lost revenue or production immediately, and keep a log of all documents produced.  Depending on the extent of the loss and the complexity of the claim, you may want to consult with an accountant familiar with business interruption losses.