Your business interruption details
Type of interruption event
Business revenue details
Interruption period
Total estimated loss
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potential claim value
Lost gross profit
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full + reduced periods
Continuing fixed costs
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during interruption
Extra expenses
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additional costs
Full loss breakdown
Normal monthly revenue
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Full closure period
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—
Reduced capacity period
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—
Continuing fixed costs during interruption
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Extra / additional expenses
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Total estimated BI loss
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📋 What this means for your insurance claim
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⚠️ Important — indemnity period
Your business interruption policy has a maximum indemnity period — typically 12, 18 or 24 months. Your claim cannot exceed the period specified in your policy. Check your policy schedule immediately to confirm your indemnity period and sum insured.
Business interruption insurance — what you need to know
Notify your insurer immediately
Most BI policies require prompt notification of a claim. Delay can jeopardise your claim. Contact your insurer or broker within 24-48 hours of an interruption event, even if you are unsure whether you are covered.
Keep detailed records
Document everything from day one — photos, financial records, invoices, communications, staff costs and extra expenses. Your insurer will require evidence of every dollar of loss claimed. Good records dramatically improve claim outcomes.
Understand your policy wording
BI policies vary significantly. Check your indemnity period, sum insured, any sub-limits, and what events are covered vs excluded. The COVID-19 pandemic highlighted how many businesses did not understand their BI coverage until they needed it.
Consider a loss assessor
For significant claims, a public loss assessor works on your behalf (not the insurer's) to maximise your settlement. They typically charge 5-10% of the claim but often recover significantly more than unrepresented claimants.
Minimise your loss
BI policies require you to take reasonable steps to minimise your loss — such as operating from a temporary location. Keep records of all mitigation costs as these are typically recoverable under the "extra expenses" section of your policy.
Review your sum insured annually
BI underinsurance is extremely common. Your sum insured should cover your gross profit for the entire indemnity period plus standing charges. Review your coverage every year as your business grows.
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Frequently asked questions
What does business interruption insurance cover?
Business interruption (BI) insurance covers loss of gross profit and increased costs of working when your business is interrupted by an insured event such as fire, flood, storm, or equipment breakdown. It is designed to put your business in the same financial position it would have been in had the interruption not occurred.
How is a business interruption claim calculated?
BI claims are typically calculated based on your gross profit (revenue minus variable costs) lost during the indemnity period, plus any additional expenses incurred to minimise the interruption. Your insurer will compare your actual results during the interruption period against your projected results based on previous trading.
What is an indemnity period?
The indemnity period is the maximum length of time your BI policy will pay claims — typically 12, 18 or 24 months from the date of the event. If your business takes longer to recover than your indemnity period, you will not be covered for the additional time. Choosing an adequate indemnity period is one of the most important BI coverage decisions.
Does business interruption insurance cover COVID-19?
This is highly policy-specific and has been the subject of significant litigation in Australia. Some older policies may provide cover for pandemic-related interruption, while most newer policies explicitly exclude infectious diseases. The Insurance Council of Australia has guidance on COVID-19 BI claims. Always consult your insurer and potentially a legal adviser for your specific policy.
What is the difference between BI insurance and property insurance?
Property insurance covers physical damage to your building and contents. Business interruption insurance covers the financial loss — lost revenue and extra costs — that results from that physical damage. Both are usually required together for comprehensive business protection.
Do I need a lawyer for a business interruption claim?
For smaller straightforward claims, a good insurance broker may be sufficient. For larger or disputed claims, engaging an insurance lawyer or public loss assessor is strongly recommended. Insurers have experienced claims professionals on their side — you should too for significant claims.