Lessons Learnt in Business Interruption

With the BI proportion of a property claim accounting for the majority of the loss, and commonly exceeding USD 100 million – it is no surprise that corporate risk and insurance professionals, as well as board level executives, are scrutinising their Business Continuity Plans and BI coverages in more detail.

However, purchasing BI cover and ensuring claims certainty in the event of a loss can be complex and require input from multiple stakeholders as well as external risk advisors and practitioners.

This view is reflected in the feedback we have received from PARIMA (Pan-Asia Risk and Insurance Management Association) members during a series of BI masterclass sessions Swiss Re Corporate Solutions have run across Asia Pacific over the last year.

Difficulties in selecting the Maximum Indemnity Period, identifying vulnerabilities across the supply chain and calculating 'Gross Profit' can lower confidence in the usefulness of the Property Damage Business Interruption (PD/BI) policy and how it would respond to a loss event.

Therefore, the case studies in this publication highlight a number of key challenges faced when setting up Business Interruption insurance cover, including:

  • Inadequate Maximum Indemnity Periods
  • Underinsurance caused by miscalculation of the Sum Insured
  • And, overlooking the impact of Non-Physical Damage Business Interruption (NDBI)

Against each case study, we also set out some practical tips and guidance to help overcome some of these challenges.


​Lessons learnt in business interruption