Actual Loss Sustained
A measure of loss reflecting the real financial impact of an interruption after accounting for saved variable costs and other offsets, rather than a purely theoretical revenue shortfall.
Business Interruption Insurance & Expert Witness Glossary
Additional Extra Expense Coverage (AICOW)
Additional expenditure incurred to maintain operations beyond standard extra expense limits, sometimes subject to separate sub-limits or economic tests depending on policy wording.
But-For Analysis
A counterfactual modeling approach comparing actual post-event trading to the financial position the business would likely have achieved absent the insured peril - central to damages and BI quantum.
Civil Authority Clause
A policy extension that may respond when access to premises is prevented or hindered by government or civil authority action, subject to distance and time conditions in the wording.
Contingent Business Interruption (CBI)
Coverage for income loss caused by an insured event impacting a dependent supplier or customer location, even where the policyholder’s own property is undamaged.
Federal Rule of Evidence 702
The Civil Procedure Rules governing expert evidence in federal and state courts, imposing a paramount duty to the court, requirements for written reports, and directions for joint discussions.
Cyber Business Interruption
Income loss arising from cyber events such as ransomware or network outages, often analysed under dedicated cyber policies when traditional BI physical damage triggers do not respond.
Delay in Start-Up (DSU)
Project-specific BI coverage indemnifying anticipated profit shortfalls when insured physical damage delays the planned commencement of operations for a construction or infrastructure project.
Economic Limit (extra expense)
A policy test capping recoverable extra expense to the additional business income thereby saved - preventing recovery of uneconomic mitigation spend.
Extra Expense Coverage
Additional costs reasonably incurred to avoid or diminish the reduction in business income during the period of restoration, subject to economic limit tests and policy sub-limits. Common in US ISO business income forms and analysed alongside extra expense endorsements in hybrid programs.
US Pandemic BI Litigation
The landmark US state and federal courts decision in US pandemic business interruption litigation clarifying coverage for many disease and hybrid BI wordings during COVID-19.
Business Income (BI definition)
In US BI policies, business income is typically defined as revenue less uninsured variable costs, forming the basis for applying the business income margin to shortfalls in revenue.
Period of Restoration
The period beginning with the damage or trigger and ending when results cease to be affected, subject to the maximum period of restoration - measuring how long BI losses remain recoverable.
Insured Standing Charges
Fixed or continuing expenses specified as insured under the BI wording, which may continue during interruption and interact with savings calculations in the standard formula.
Loss Adjuster
A claims professional appointed to investigate and recommend settlement; distinct from an independent expert witness who owes duties to the court under Federal Rule of Evidence 702 when instructed in litigation.
Maximum Period of Restoration (policy limit)
The outer time cap in many US BI policies limiting how long recoverable losses may accrue, irrespective of whether financial normalization takes longer in practice.
Named Perils Policy
A policy listing specific insured perils; BI coverage responds only where the interruption flows from a listed peril, subject to exclusions and extensions.
Non-Damage BI
Extensions or standalone covers responding to interruption without traditional physical damage to insured property - for example certain disease, access, or cyber extensions.
Notifiable Disease Clause
A coverage extension referencing diseases notifiable under public health legislation; interpretation was central to many COVID-19 disputes resolved in the US pandemic BI litigation.
Period of Restoration
A term more common in US programs describing the reasonable period to repair, rebuild, or restore property to pre-loss condition - not always identical to the US period of restoration concept.
Policy Trigger
The insured event or condition that must occur for BI coverage to activate, such as physical damage, disease, denial of access, or a specified cyber incident.
Prevention of Access Clause
Language responding when access to or use of premises is hindered or prevented by an insured peril within defined radii and time conditions - frequently analysed alongside disease extensions.
Property Damage Trigger
Traditional BI wording requiring physical loss or damage to insured property as the starting point for coverage, still central in many US commercial property policies.
Business Income Margin (business income margin)
The ratio of business income to revenue derived from pre-loss financials, applied to shortfalls in revenue to calculate loss of business income in standard US BI calculations.
Savings on Insured Standing Charges
Reductions in continuing charges during interruption that offset recoverable loss within the US BI formula, requiring careful reconciliation with management accounts.
court-appointed expert
An expert appointed jointly by parties or directed by the court to give a single opinion on a defined issue, used in some lower-complexity BI disputes but less common in high-value quantum fights.
Standard Revenue
The adjusted revenue the business would have achieved during the period of restoration but for the interruption - the comparator baseline in the classic US business income calculation.
Daubert Duties
Foundational US expert witness principles requiring objectivity, range-of-opinion disclosure, and paramount duty to the court rather than the instructing party, stemming from National Justice Compania Naviera SA v Prudential Assurance Co Ltd (Daubert) [1993].
Wide Area Damage (WAD)
Regional catastrophe conditions affecting multiple insureds and infrastructure simultaneously, raising aggregation, exclusion, and concurrent cause issues in BI quantification.
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