What does business income calculation include?

The correct choice takes into account the comprehensive nature of business income calculation, which is essential for determining how much a business would lose in income due to a covered peril.

This calculation includes net profit or loss before taxes, as this reflects the true profitability of the business without the influence of tax obligations. Additionally, it incorporates continuing expenses that the business would incur during the period of income loss. These ongoing expenses might include salaries, rent, utilities, and other operational costs that the business must still pay, even if it is temporarily shut down or experiencing reduced operations due to a covered event.

By considering both net profit prior to tax and the necessary continuing expenses, this definition ensures that businesses receive compensation that accurately reflects their loss of income as well as their ongoing financial commitments, thereby allowing them to recover more effectively from interruptions. This holistic approach aligns with the intent of business interruption insurance, which is to put the business back in the same financial position it would have been in if the loss had not occurred.