Business interruption risk

Business interruption risk is the risk that a business's operations will be disrupted, causing lost revenue and extra costs. It can arise from property damage, supply chain failures, cyberattacks, utility outages or other events. It is a risk management concept; businesses address it through insurance, contracts, contingency planning and backup arrangements.

How BC law treats it

No BC statute requires ordinary businesses to carry business interruption insurance or to have a business continuity plan, although leases, loan agreements and contracts often require insurance. Interrupted operations can also raise employment issues, such as temporary layoffs under the Employment Standards Act, RSBC 1996, c 113, which generally does not require wages for time not worked.

What it means for your business

A business should identify its key dependencies, such as premises, suppliers and systems, and decide which risks to insure and which to manage by contract.

Risks and common mistakes

Laying off staff during an interruption without a contractual or statutory basis can expose the business to constructive dismissal claims.

For the full explanation, see our entry on Business interruption policy.

General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.