Business Interruption
Loss of gross profit and increased cost of working while the business is unable to trade after property damage that is itself covered.
Also calledFire Loss of Profit · FLOP · Consequential Loss
In shortA business interruption claim needs 10 documents, and the ground insurers most often rely on to reduce or refuse it is this: the underlying material damage claim not admitted, which usually takes this with it.
First thing, todayStart the record of lost production and lost orders on day one. It cannot be reconstructed convincingly later.
- Tell the insurer now, not after the assessment.
- Start the figures on day one the period of indemnity runs from the loss, not from when somebody got to it.
- Every document within the time the insurer asks for it.
When you would claim
- Production stopped or reduced after a covered property loss
- Premises unusable while reinstatement is carried out
- Extra cost incurred to keep trading, such as hired plant or outsourced work
- A supplier or customer's premises damaged, where extended
What insurers most often rely on
- The underlying material damage claim not admitted, which usually takes this with it
- An indemnity period too short to cover the actual outage
- Gross profit under-declared, so average applies here as well
- Losses reconstructed after the event rather than recorded as they arose
Every one of those is answerable, and several are decided by what was done in the first two days rather than by anything argued later.
The documents
most of it exists already10 items, and most of them exist somewhere in your own office already. Assemble them once and properly; a file sent in pieces takes three times as long to settle.
- Claim form and the material damage claim it follows
- Audited accounts for the previous years
- Monthly turnover, production and despatch figures either side of the loss
- Order book, and evidence of orders lost or delayed
- Payroll and standing charge records for the indemnity period
- Invoices for increased cost of working
- The auditor's or accountant's working of the loss
- Cancelled cheque and bank details in the insured's name, for the NEFT payment
- Details of any other insurance covering the same risk
- The gross profit working: turnover before and after, the standing charges that carried on, and the dates you were actually down
Next
Fire Claim: The First 72 Hours, and what it shares with this
An interruption claim rides on the damage claim underneath it, so start with the procedure for what was damaged. Then put a date on the day production stopped and a date on the day it resumed, because the gap between them is the claim.
Check the indemnity period
Two things cap this and neither is the building. The gross profit you declared, which is averaged the same way a sum insured is, and the indemnity period, which is routinely set at twelve months because twelve months is the default.
Filed under: Property and engineering · Lost income and interruption
Claims that sit next to this one
the same premises, or the same eventFire and Special Perils
the damage this cover waits on
Machinery Loss of Profit
the same idea, driven by a breakdown
Deterioration of Stock
stock that spoils while you are down
One of the claims our Udaipur office sees most.
Production stopped and the losses still running? Report a loss or call 92514 56334.
Business Interruption, Claims Desk by RFS, https://claimsdesk.in/claims/business-interruption. Checked 13 September 2026.
Quote it, link to it, or reproduce it with the address attached. If you are writing about a claim and need the rule behind a line here, the desk will point you at the source: press and citation.