What is the term for the condition under a BI policy requiring a property policy to indemnify before it operates?

The term that describes the condition under a business interruption (BI) policy requiring that a property policy indemnifies before the BI policy operates is known as a property damage proviso. This concept emphasizes that a loss must first be covered by the property insurance in order for the business interruption coverage to become applicable.

In practice, this means that if the property itself is not damaged and the claim does not trigger the property policy, then the business interruption policy will not provide coverage for the subsequent loss of income resulting from that damage. The rationale behind this proviso is to ensure that the initial loss is attributed to a tangible property damage event before further claims for lost income can be processed under the business interruption aspect of the policy.

This aligns with the fundamental principles of insurance, where coverage is sequential, ensuring that the insured first seeks redress through the appropriate primary coverage (in this case, property insurance) before turning to secondary coverage (such as business interruption).