Business Interruption for Hydroponic & Indoor Farms
A commercial hydroponic operation generates revenue continuously. Crops are always in some stage of growth. If a fire destroys your greenhouse or a flood takes out your control room, you face not just reconstruction costs but weeks or months of lost revenue.
What BI Covers
- Lost net income: Revenue you would have generated during the shutdown period
- Continuing fixed expenses: Rent, utilities, loan payments, employee salaries that continue during shutdown
- Extra expense: The additional cost to temporarily operate elsewhere or speed up recovery
- Extended period of indemnity: Some policies extend coverage beyond restoration to account for the ramp-up period
The Ramp-Up Problem
This is unique to agriculture: even after a hydroponic facility is physically restored, you don't immediately have full crops to sell. Lettuce takes 30-45 days to mature. A BI policy with an extended period of indemnity covers you through this ramp-up period, not just until the building is repaired.
Calculating BI Limits
BI limits should reflect: monthly revenue × expected recovery time (typically 6-12 months for a hydroponic operation). Underinsuring here is common — work with us to calculate your actual exposure.
Frequently Asked Questions
What triggers business interruption coverage?
BI is triggered by a covered physical loss — the same events that trigger your property policy. If fire damages your facility and forces a shutdown, BI kicks in for the revenue loss during restoration.
How long does BI coverage last?
The standard is the period of restoration. For hydroponic operations, we recommend adding an extended period of indemnity (typically 90-180 days) to cover the crop ramp-up period after restoration.