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Claim denied form. Finding a workable method to efficiently and effectively handle an increase in business interruption claims could require looking at these claims from a different perspective. (Photo: Shutterstock)

It’s just so clear — business interruption (BI) claim handling proves that BI cover would best serve insureds, insurers, and economies if the cover migrates from an indemnity model to parametric. There’s entirely too much under-productive effort expended for insureds proving a claim, and too much claim handler time expended confirming the proof.

A real-world example helps prove the case. A business that averages less than $500K revenues per year recently suffered a covered loss that prompted the biz to experience a full shutdown over a full calendar quarter. The insured presented the claim with substantiation of prior year financial activity and proof of the current year’s activity comparatively to help the carrier to calculate the BI loss, BI cover being as defined in the policy as the reduction in net income for the covered period, and excess expenses incurred solely due to the effect of the covered peril.

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