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 turnover shortfall.
Business Interruption Insurance & Expert Witness Glossary
Additional Increased Cost of Working (AICOW)
Additional expenditure incurred to maintain operations beyond standard ICW limits, sometimes subject to separate sub-limits or economic tests depending on policy wording.
But-For Analysis
A counterfactual modelling 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.
CPR Part 35
The Civil Procedure Rules governing expert evidence in England and Wales, 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 (ICW)
A policy test capping recoverable increase in cost of working to the additional gross profit thereby saved - preventing recovery of uneconomic mitigation spend.
Extra Expense Coverage
Coverage for necessary additional costs incurred to continue operations during restoration, more common in US-style programmes; often analysed alongside ICW in hybrid global placements.
FCA Business Interruption Test Case
The landmark UK Supreme Court decision in Financial Conduct Authority v Arch Insurance (UK) Ltd & Others [2021] UKSC 1 clarifying coverage for many disease and hybrid BI wordings during COVID-19.
Gross Profit (BI definition)
In UK BI policies, gross profit is typically defined as turnover less uninsured variable costs, forming the basis for applying the rate of gross profit to shortfalls in turnover.
Increase in Cost of Working (ICW)
Additional costs reasonably incurred to avoid or diminish the reduction in gross profit, subject to economic limit tests and any express sub-limits in the schedule.
Indemnity Period
The period beginning with the damage or trigger and ending when results cease to be affected, subject to the maximum indemnity period - 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 CPR Part 35 when instructed in litigation.
Maximum Indemnity Period (MIP)
The outer time cap in many UK BI policies limiting how long recoverable losses may accrue, irrespective of whether financial normalisation 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 FCA test case.
Period of Restoration
A term more common in US programmes describing the reasonable period to repair, rebuild, or restore property to pre-loss condition - not always identical to the UK indemnity period 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 UK commercial property programmes.
Rate of Gross Profit (ROGP)
The ratio of gross profit to turnover derived from pre-loss financials, applied to shortfalls in turnover to calculate loss of gross profit in standard UK BI calculations.
Savings on Insured Standing Charges
Reductions in continuing charges during interruption that offset recoverable loss within the UK BI formula, requiring careful reconciliation with management accounts.
Single Joint Expert (SJE)
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 Turnover
The adjusted turnover the business would have achieved during the indemnity period but for the interruption - the comparator baseline in the classic UK gross profit calculation.
The Ikarian Reefer Duties
Foundational UK 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 (The Ikarian Reefer) [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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