Business Interruption: More Than Lost Revenue
Business interruption is often one of the most significant and misunderstood parts of a commercial property insurance claim.
Most business owners view the claim through a common-sense lens: if the loss had not occurred, the business would have continued operating, generating revenue, and serving customers. While that sounds straightforward, determining the true financial impact of a loss is often much more complex.
What would the business have earned had the loss never occurred?
Answering that question requires looking beyond financial statements. Historical performance is important, but so are seasonal trends, projected growth, future reservations, signed contracts, booked events, expansion plans, and other indicators of where the business was headed before the loss occurred. For some businesses, customers can be retained through temporary operations, outsourcing arrangements, or strategic partnerships. For others, once a customer leaves, they may never return. Understanding how the interruption affects customer retention, market share, and future opportunities can be just as important as reviewing the accounting records.
Business interruption is not simply a financial calculation. It is an evaluation of where the business was before the loss, where it was headed, and how the covered event changed its operations, profitability, and future growth.
The Property Damage Claim and Business Interruption Claim Must Be Evaluated Together
One of the biggest mistakes made in commercial claims is treating the business interruption claim separately from the property damage claim.
The scope of repairs, availability of materials, permitting requirements, contractor scheduling, equipment replacement timelines, and claim-handling decisions all affect how long a business remains disrupted. That timeline often drives the business interruption loss.
An incomplete repair scope, delayed claim decisions, or prolonged settlement negotiations can significantly extend a business's recovery period beyond what was originally anticipated. Likewise, contractor availability and repair sequencing can create additional delays that directly impact operations. Whether those delays are recoverable under the policy often becomes a point of dispute.
Because of this, the property damage claim and business interruption claim should be evaluated together from the beginning. Decisions made on the building side of the claim frequently have a direct impact on the financial side.
A Coordinated Recovery Strategy
At Berger Adjusters, we evaluate the policy conditions, physical damage and financial components of a commercial property claim as part of a coordinated recovery strategy.
Our objective is not simply to determine what was damaged. It is to understand what the business lost, what it will take to get it back on track, and how the policy should respond. By evaluating the property damage and business interruption claims together, we can often develop a more accurate picture of the loss, support a realistic recovery plan, and pursue the benefits available under the policy to help the business move forward.