First party insurance that indemnifies the owner or user of property for its loss, or the loss of its income-producing ability, when the loss or damage is caused by a covered peril, such as fire or explosion and insurance covering loss of income suffered by business when damage to its premises by a covered cause of loss causes a slowdown or suspension of its operations during the time required to repair or replace the damage property.
EXAMPLE:
Suppose a company owns a factory that produces electronic devices. One day, a fire breaks out in the factory and damages the machinery, inventory and building. The company has to stop its production until the damage is repaired or replaced. This causes a loss of income for the company, as well as additional expenses to restore its operations. The company has a PDBI insurance policy that covers the cost of repairing or replacing the damaged property, such as machinery, inventory and building.