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People looking at spreadsheets. BI claim calculations are part science and part art. Most specialists within this niche will have credentials in forensic accounting. (Photo: BlueSky Image/Shutterstock)

A business interruption (BI) claim is likely to be triggered by either some form of property damage, a cyber event or a product recall/contamination issue. Policies often define business interruption or loss of business income using verbiage like ‘net profit plus continuing expenses’. The latter may include payroll for a determined period. This is known as the ‘bottom-up’ (BU) approach.

An easier method to follow, which ultimately should be reconciled to the BU approach is the ‘top-down’ (TD) method, which projects gross revenue, reduces it for any actual revenue earned during the indemnity period, and then further reduces it by what’s called a saved/discontinuing/non-continuing expense, usually expressed in percentages (e.g., cost of goods sold).

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