ICW, AICOW & Extra Expense Disputes - BI Expert Witness
Disputes over increase in cost of working (ICW), additional increased cost of working (AICOW), and US-style extra expense often turn on whether each line of spend passes economic limit tests and whether savings have been properly credited. Experts rebuild the counterfactual: what gross profit would have been lost absent the expenditure, and whether the policy arithmetic permits recovery.
Hybrid global programmes may stack UK ICW clauses with foreign extra expense endorsements. Specialists reconcile currency, tax treatment, and sub-limits so quantum opinions do not double count recovery.
CPR Part 35 reports should disclose judgment calls on reclassified costs and present alternative treatments where professional practice reasonably differs.
Frequently Asked Questions
What is the economic limit test for ICW?
Broadly, insurers only reimburse ICW spend that avoids more gross profit loss than it costs - preventing recovery of uneconomic mitigation. The exact formulation depends on policy wording; experts model the comparison using disclosed invoices and projected gross profit.
How do experts separate ICW from uninsured working expenses?
They map each cost line to the policy’s lists of uninsured working expenses and insured standing charges, then test whether spend is truly variable to turnover or fixed - misclassification is a frequent driver of disputed quantum.
Glossary Terms
Short definitions for terminology used on this page - see the full business interruption glossary.
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