Business Interruption: Introduction to BI Losses

The “Business Interruption: Introduction to Business Income and Extra Expense Losses” course teaches insurance professionals about the basics concepts surrounding handling a business income claim, including understanding the key terms related to Business Income and calculating a business income loss. The module is presented by Lourdes Reyes, Executive General Adjuster at Allianz Global & Specialty, and Katharyn Thompson, Partner at RGL Forensics.

The module begins with a summary of the history of time element coverage and explores the elements of a covered business income loss and some key policy terms. The presenters discuss complex issues such as the ordinary payroll limitation and fixed vs. variable expenses. The presenters provide actionable tips such as what duties the insured has, and what questions to ask throughout the process. The module goes into specific detail about the types of business income formulas, how they are related to one another, and where to obtain the necessary information. The module explores several hypothetical scenarios to walk through business income losses and calculations.

After completing the course, the attendee will be able to understand the purpose of business income and extra expense coverage, understand the policy language and identify how coverage applies, describe additional provisions pertaining to policy periods and potential duplication with other coverages, identify and utilize the formulas used for calculating a business income loss and extra expenses, apply either a Top-Down or Bottom-Up approach, and apply these formulas even in the case of partial shutdowns, understand the important considerations necessary to make reasonable projections, be aware of factors such as seasonality, industry data, and Best Year Syndrome which may impact projections, and watch out for timing issues which may otherwise lead to errors in calculating a business income loss. The course is designed for insurance professionals working in the area of property adjusting.