Business interruption
Ten things that quietly shrink a BI payout.
Business-interruption claims are rarely refused outright. They are reduced — a bit here, a bit there — until the figure that gets paid is a long way below the loss the business actually suffered. Here is where the value tends to leak.
- The indemnity period is set too short. Recovery almost always takes longer than people expect. If the policy's indemnity period is too short, the claim is capped before the business has recovered.
- Only lost sales are claimed. The measure is lost gross profit, not lost turnover — and the two are very different numbers.
- Standing costs are forgotten. Rent, salaries, finance and other costs that carry on while you cannot trade are usually recoverable, and are routinely left out.
- Increased cost of working is under-claimed. The extra you spend to keep trading — temporary premises, overtime, hired equipment, expedited supplies — is claimable when it reduces the overall loss.
- Growth is ignored. The claim should reflect where the business was heading, not just last year's figures. A business that was growing is entitled to have that trend reflected.
- Seasonality is averaged away. Losing your busiest month is not the same as losing a quiet one. A flat monthly average understates a peak-season loss.
- The "trends" and adjustments clauses are used against you, not for you. These clauses exist to make the figure fair — including in your favour.
- Poor records become the insurer's argument. Gaps in the numbers get read in the insurer's favour. A clear, contemporaneous cost record changes that.
- The claim is quantified once, then not defended. The first figure is an opening position. Each reduction the adjuster proposes should be tested, not accepted.
- It is settled too early. Pressure and cash-flow strain push businesses to sign for less than the claim is worth. Understanding the real number first is what prevents that.
Before you settle
Find out what the claim is really worth first.
We rebuild and quantify the loss on the policy's own terms, then pursue it. The first review is free and confidential.