CP 00 30 is the ISO Business Income (and Extra Expense) Coverage Form, which pays the actual loss of business income you sustain when direct physical damage from a covered cause of loss forces you to suspend operations, plus the extra expenses you incur to keep the business running. It is the most frequently used time element form in commercial property insurance, and it responds during the period of restoration, the window between the damage and the date the property should reasonably be repaired.
Property insurance that rebuilds your building does nothing about the revenue that stops while contractors work. This page explains what the form counts as business income, how the period of restoration starts and ends, and why the coinsurance condition makes an accurate income projection the most important number on the policy.
What does CP 00 30 pay for?
The form pays the actual loss of business income you sustain due to the necessary suspension of your operations during the period of restoration. Business income means the net income, meaning net profit or loss before income taxes, that would have been earned, plus continuing normal operating expenses incurred, including payroll. A business projected to earn $100,000 with $50,000 of continuing expenses recovers $150,000 for the shutdown period.
The definition works even for an unprofitable business, because a company heading for a $10,000 loss with $50,000 in continuing expenses still recovers $40,000, which puts it exactly where it would have been without the fire. The form restores your position, it never improves it.
Extra expense is the second insuring agreement, covering necessary expenses during the period of restoration that you would not have incurred without the damage. That includes relocating to temporary quarters, equipping the replacement space, and overtime to catch up.
Expenses to repair or replace property are covered only to the extent they reduce the loss otherwise payable, so paying a premium for rush delivery of a critical machine makes sense when it shortens the shutdown. Businesses that cannot afford any interruption at all, like medical practices and newspapers, sometimes carry the standalone Extra Expense Coverage Form CP 00 50 instead.
How does the period of restoration work?
The period of restoration is the engine of the form, because loss is only paid inside it. It runs on two different clocks depending on the coverage, and it ends on the earlier of the date the property should be repaired with reasonable speed and similar quality or the date business resumes at a new permanent location:
| Feature | Business income | Extra expense |
|---|---|---|
| Begins | 72 hours after the direct physical loss | Immediately after the direct physical loss |
| Ends | When the property should reasonably be repaired, or business resumes at a new permanent location | Same ending point |
| Waiting period buyback | Available by endorsement | Not needed |
Two details in that definition carry real money. The period ends when repairs should be complete with reasonable speed, not when they actually finish, so an insured who drags out the rebuild does not extend the recovery. And the policy expiration date has no effect on it, because the policy in force at the time of loss pays for the entire period of restoration even if the policy expires mid-rebuild.
The 72-hour wait on the business income side can be shortened or removed by endorsement, which matters to businesses where three dark days is serious revenue.
How does business income coinsurance work?
If a coinsurance percentage appears on the declarations, the limit you carry is measured against the net income and operating expenses for the 12 months following policy inception, multiplied by that percentage. Carry less than the formula requires and the recovery on every claim is reduced proportionally, using the familiar did-over-should calculation.
The honest way to comply is a business income worksheet, which projects the coming year's income rather than copying last year's tax return. Choosing the percentage itself is a judgment about how long a worst-case shutdown would last, because a business that could be down 18 months needs a higher percentage than one that could relocate in a month. Our business income insurance guide walks through the worksheet in more detail.
What has to be true before the form pays?
The trigger is stricter than most insureds assume. The suspension must be caused by direct physical loss of or damage to property at the described premises, and that damage must come from a covered cause of loss under the attached causes of loss form.
A neighborhood power outage, a supplier failure, or a pandemic closure with no physical damage at your premises does not trigger the base form, though additional coverages for civil authority and endorsements for dependent properties and utility services address some of those gaps.
Because the causes of loss form controls the trigger, a business income policy paired with a named perils form inherits every hole in it, which is one more reason most buyers pair CP 00 30 with the special form CP 10 30. The underlying property values themselves sit on CP 00 10, and both forms should be built from the same understanding of the operation.
Where can you see the actual form?
Menlo does not host ISO forms because they are copyrighted by Insurance Services Office, Inc. You can read the real text through your own policy, which attaches every form issued on it, or by asking your broker for the specimen your carrier files. Regulator-approved filings are also publicly viewable through SERFF Filing Access, the state filing system, though the forms there remain copyrighted and are for reading, not copying.
Frequently asked questions
What is the difference between CP 00 30 and CP 00 32?
CP 00 30 covers both business income and extra expense. CP 00 32 provides the same business income coverage without extra expense, substituting a narrower coverage called expenses to reduce loss, which pays extra costs only up to the amount they save the insurer. Businesses that would spend real money to stay open during a rebuild want CP 00 30.
Does CP 00 30 pay if the power goes out but my building is undamaged?
Not under the base form, because the trigger requires direct physical damage at the described premises from a covered cause of loss. An off-premises utility interruption needs a utility services time element endorsement, and damage at a key supplier or customer needs a dependent properties endorsement.
How long does CP 00 30 keep paying?
Through the period of restoration, which ends when the property should reasonably be repaired with similar quality or when business resumes at a new permanent location, whichever comes first. An extended business income provision then continues coverage for a limited time after reopening while revenue climbs back, and that window can be lengthened by endorsement.
Does CP 00 30 cover payroll during a shutdown?
Yes. Continuing normal operating expenses explicitly include payroll, so wages you keep paying while closed are part of the business income loss. Endorsements exist to limit or exclude ordinary payroll for insureds who would furlough staff, which lowers the required limit and the premium.
This guide is for educational purposes and summarizes standard ISO policy language in Menlo's own words. Form numbers and titles are cited for identification only, and Menlo Insurance Services is not affiliated with Insurance Services Office, Inc. Your policy's specific terms, conditions, and endorsements control. Talk to a licensed broker about your actual exposures.