One of the types of insurance coverage offered to businesses is business interruption coverage. This type of coverage provides protection to businesses for income losses resulting from unexpected events.
A recent Allianz report outlined some global trends regarding business interruption claims. The report is based on data from over 1,800 large business interruption claims. The claims came from 68 countries and were made between 2010 and 2014.
One of the things the report showed is that many business interruption claims involve fires and explosions. According to the report, for the 2010 to 2014 period:
- Fires/explosions were the No. 1 cause of business interruption losses globally.
- 59 percent of business interruption claims globally involved fires/explosions.
- 52 percent of business interruption losses in North America involved fires/explosions.
Another thing the report found is that globally, business interruption claims are going up in frequency.
Business insurance claims have also been going up in severity globally and can be quite high in amount, the report indicates. According to the report, the average large business interruption claim is over a third larger in amount than the average corresponding claim for property damage, with large business interruption claims averaging $2.4 million a claim.
These sorts of trends could have very big impacts for insurance companies that offer insurance coverage to businesses. Claim frequency and severity can have significant financial implications for such insurance companies.
Not all claims made to an insurance company by a business are valid. For example, businesses sometimes make claims for things that aren't actually covered under the terms of their policy. Sometimes, insurance companies end up in disputes with a business after denying an invalid insurance claim the business made. The guidance of a lawyer with deep experience in insurance law matters can be a very helpful thing for insurance companies to have when in disputes with a business over a business interruption claim denial or other claims denials regarding business-related insurance.
Source: Insurance Journal, "Business Interruption Claims on the Rise: Allianz," Dec. 10, 2015