A Policyholder's Common-Sense Approach to Business Interruption Claims

One reason that business interruption insurance claims have flown largely below the legal radar is that they have historically been an adjunct to a form of insurance where prompt and amicable adjustment has generally been the rule: property insurance. Business interruption claims tend to be resolved in the ordinary course, as part of a more-or-less predictable book of business. The first-party nature of business interruption insurance claims has also contributed to their less litigious character. Unlike many of the other forms of insurance coverage, business interruption insurance rarely involves underlying claims that are themselves the subject of litigation. The numerous coverage exclusions associated with alleged insurer misconduct are thus rarely implicated. In contrast to liability insurance claims, business interruption claims rarely involve a “tail.” As a consequence, they do not involve thorny problems concerning trigger of coverage and how losses should be allocated among multiple policy periods.