22 September 2020

Business Interruption (BI) Claims

BY: Henry Densham | IN: Articles


Hurricane Sally is the latest storm to make landfall in the US. It is inevitable that interruption to normal business practices will be caused by the need to repair hurricane related damage.

As Insureds commence the restoration process necessary to return their businesses to operation, Insurers will need to ensure the correct expertise is applied to the claims management process. Timely payments will help ensure that Insureds can make the repairs necessary to return to operation as soon as possible.

The determination of the Interruption period payable under an insurance policy can sometimes be complicated by Insureds often choosing to carry out upgrades and maintenance to their businesses while repairs are being carried out. In addition, code upgrades and permitting issues often provide another layer of complexity and potential extension of the interruption period.

CCi are established experts in timeline analysis of Business Interruption claims. CCi has significant experience working on hurricane related BI claims and establishing periods of interruption caused by repairing damage from an event to the condition it was in prior to the event.

CCi Timeline Analysis of Business Interruption.

The objective of any timeline analysis on Business Interruption loss is to determine the period of interruption required by the Insured to repaid damaged property, to the condition it was in prior to the loss event.

CCi achieves this by:

  • Schedule analysis to identify critical path and key drivers defining period of interruption
  • Forensic analysis of schedule activities to identify any extension of the interruption period caused by:
  • Upgrades / betterments to the Insured property that represent an improvement of what was present before the Insured event.
  • Maintenance / non-loss related activities being carried out at the same time as the property repairs
  • Code upgrades increasing the design, procurement and installation time for some areas of damage
  • Permitting issues relating to additional changes from code requirements, upgrades or betterments and non-loss related construction extending repair period

By highlighting and quantifying the time periods associated with non-loss activity that extends the period of interruption, CCi can clearly and objectively provide a supportable position on the length of the interruption period required, to repair damaged property to the condition it was before the Insured event.