What BI coverage pays
Commercial business interruption coverage pays for:
- Net income the business would have earned during the period of restoration
- Continuing operating expenses that continue despite the shutdown (rent, utilities, insurance, minimum payroll)
- Extra expense: additional costs to continue operations at a temporary location or with workarounds
- Contingent BI (if endorsed): when the loss is at a supplier or major customer
- Extended BI (if endorsed): period after reopening before full revenue returns
Period of restoration
Runs from date of loss until the property is or reasonably should have been repaired. Carriers dispute:
- Start date (when did operations actually stop?)
- End date (when could operations reasonably have resumed?)
- Extended period (recovery back to normal revenue)
- Seasonal adjustments (loss during peak season vs. trough)
Documentation essentials
Historical financials
- 3 years monthly P&Ls
- 3 years monthly bank statements
- Tax returns (federal and state)
- General ledger export
Operations documentation
- Customer/invoice history
- Inventory records
- Payroll registers
- Fixed cost documentation (lease, insurance, utility bills)
Loss-period documentation
- Operations timeline during shutdown
- Partial-operation records if applicable
- Temporary location costs
- Extra expense ledger
- Customer communications
Common BI disputes
Net income calculation
- Carrier uses simple revenue × margin; policyholder argues seasonal/growth adjustments
- Fixed vs. variable cost allocation
- Excluded costs (discretionary, owner-benefit)
Ordinary payroll
Most BI policies exclude ordinary payroll (you're not producing). But they include:
- Key-employee payroll
- Minimum necessary payroll
- Sometimes owner/partner compensation
Policy language controls.
Contingent BI
If a supplier or major customer suffers a covered loss that affects your business, and you have contingent BI, recoverable. Often overlooked.
Extra expense
Rent at a temporary location, expedited shipping, overtime to catch up: all recoverable when documented. Often under-claimed.
The forensic accounting dimension
Most BI claims benefit from a forensic accountant: a CPA with BI-claim experience who:
- Reviews historical financials for trending
- Adjusts for seasonality
- Calculates lost income by month
- Documents extra expense
- Presents to the carrier in a defensible format
Ocean Point works with forensic accountants on most commercial BI claims.
Statutory framework
Standard Florida commercial property policies include BI as an additional coverage. Same statutory deadlines apply (627.70131, 627.70132). Same escalation paths (supplemental, appraisal, CRN, litigation).
Common policy structures
12-month BI
- Most common
- Covers losses within 12-month period of restoration
- Aggregate limit applies
Actual loss sustained (ALS)
- Some policies pay actual loss up to policy limit
- No specific period cap
- More policyholder-favorable
Time-element with co-insurance
- Some policies require coinsurance (you must insure to 80% of annual income)
- Failure to meet coinsurance reduces payment
Verify your specific form.
When BI claims fail
- Weak historical documentation
- Mixed with personal expenses (owner-benefit intermingled)
- Cash-heavy business without bank records
- Minimal documentation during the loss period
How Ocean Point handles commercial BI
- Initial financial document review
- Forensic accountant retention
- Period-of-restoration documentation
- Monthly lost-income calculation
- Extra expense ledger
- Negotiation or escalation