When a business interruption (BI) loss occurs, the financial impact can be immediate and significant. Revenues stop, operations are disrupted and the path back to normal can feel uncertain.
But the outcome of a BI claim is rarely determined only by the loss itself. More often, it comes down to preparation, clarity and how well the claim is presented.
Forensic accountants, such as those at BRG, work alongside policyholders and their brokers to analyse financial data, build credible loss models and prepare claims that are robust, well-documented and clearly presented.
Importantly, BRG acts exclusively for policyholders rather than insurers, supporting businesses across a wide range of BI losses, including Property, Construction, Cyber and W&I claims.
Following a recent interactive training session delivered by BRG for Consilium’s Claims team and broking colleagues, several practical lessons emerged that policyholders should keep in mind long before a claim ever arises.
1. Getting the Foundations Right
The most important work on a BI claim often happens before any loss occurs. Ensuring that policy wording is clear and aligned with the real risks facing a business is critical. That means carefully considering both the potential scale of financial loss and the maximum indemnity period required to recover.
Recovery from a major interruption often takes far longer than businesses expect, so purchasing a longer indemnity period can be a vital safeguard when placing BI cover.
2. Understanding What ‘Gross Profit’ Really Means
One of the most common areas of confusion in BI claims lies in the definition of ‘Gross Profit’. In day-to-day accounting terms, businesses typically calculate gross profit in a way that reflects their internal financial reporting. Insurance policies, however, apply a specific policy definition, which can differ significantly from the accounting approach used internally.
It is often only after a loss occurs that this difference becomes clear - sometimes resulting in a significant gap between what a business expected to recover and what the policy actually covers. Understanding how this definition works within the policy can help avoid difficult surprises later.
3. Being Able to Tell the Story of Business
A successful BI claim relies on more than financial records alone. Policyholders need to be able to clearly demonstrate how the business performed before the loss, explain the operational impact of the interruption and provide credible evidence of the recovery process as it unfolds.
At a granular level, this means connecting the financial loss directly to the interruption itself. The clearer and more structured the narrative is, the easier it becomes to present a claim that aligns with the policy wording. For many policyholders, this is where specialist expertise becomes invaluable.
4. Bringing the Right Expertise Into the Claims Process
If a loss does occur, early engagement with claims specialists can make a significant difference to the outcome. Consilium’s Claims team works closely with policyholders to guide them through the process and, where appropriate, introduce specialist experts such as forensic accountants who can help structure and present the claim effectively.
Another consideration is ensuring that policies include cover for claim preparation costs, including forensic accounting fees. This can allow policyholders to bring expert support into the process without adding further financial pressure at an already difficult time.
5. Controlling the Narrative
Ultimately, the way a claim is presented can shape how quickly and effectively it progresses. When the financial evidence is clearly prepared and aligned with the policy wording, policyholders are far better placed to demonstrate the validity of their loss and maintain control of the narrative surrounding the claim.
In many cases, this clarity can encourage insurers to provide earlier interim payments, helping businesses maintain cash flow while the claim is finalised. The alternative scenario, where insurers take the lead in defining the loss, can often result in less favourable outcomes that are difficult and costly to challenge later.
Preparation Makes the Difference
Business interruption claims are complex by nature, but with the right preparation and support, policyholders can approach them with far greater confidence. As the training with BRG highlighted, the combination of clear policy wording, realistic expectations and strong financial evidence can significantly improve the claims process.
When the right expertise is involved from the outset, policyholders are far better positioned to secure the full value of the protection their insurance is designed to provide.
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