The setting
- Property type: Commercial retail property
- Year of loss: 2023
- Region: Central Florida
- Claim type: Business interruption following a covered property damage event
- Original carrier position: BI limited to 8 weeks; actual closure was ~22 weeks
What the insurer argued
The carrier argued the business reasonably could have resumed operations within 8 weeks. The longer closure period the business actually experienced was attributable to factors outside the BI coverage: contractor scheduling delays, permit delays, and the business owner's own decisions about timing.
What the policyholder argued
The business owner's position was that:
- The actual period of restoration reflected real-world constraints: post-hurricane contractor availability was limited statewide
- Permit turnaround times in the jurisdiction were documented as multi-week even for standard repairs
- The business was operating with commercial reasonable diligence throughout
- "Reasonable" period of restoration is measured by actual market conditions, not theoretical construction timelines
What we submitted at mediation
- Contractor-availability documentation from multiple Central Florida contractors showing post-hurricane backlog
- Jurisdiction permit-processing records documenting actual turnaround
- Business operating records showing active restoration efforts throughout the period
- Period of restoration analysis citing standard BI policy language and Florida case law interpretations
- Lost-income calculation using 3-year historical baselines and industry trend adjustments
What the mediator observed
The "reasonable" period-of-restoration standard must account for real-world conditions. Post-hurricane contractor backlog and permit delays were documented market-level constraints. The mediator noted these were factors beyond the business's reasonable control.
Outcome
BI coverage extended to approximately 18 weeks (vs. the carrier's initial 8 weeks). The settlement included lost net income, continuing operating expenses, and reasonable extra expenses throughout the corrected period.
Lesson for other policyholders
BI period-of-restoration disputes are frequent and often recoverable. The "reasonable" standard includes real-world market constraints, not just theoretical construction timelines. Documentation of contractor availability, permit processing, and restoration efforts all supports the extended period.