Indemnity Period & Maximum Recovery
The indemnity period measures how long results remain affected by the insured interruption, subject to the maximum indemnity period (MIP). Disputes often separate physical reinstatement from the longer horizon required to restore turnover and margin.
Experts correlate marketing spend, order book replenishment, and sector benchmarks to justify why financial normalisation extends beyond engineering sign-off - always capped by the scheduled MIP.
| Milestone | Evidence focus | Typical deliverable |
|---|---|---|
| Start date | Damage / trigger alignment | Agreed or argued start |
| Operational resume | Partial capacity vs full margin | Capacity curve |
| Financial normalisation | GP trend vs but-for | Proposed end date range |
| MIP cap | Broker schedule limits | Loss truncated to MIP |
Frequently asked questions
What is the indemnity period in BI insurance?
It is the period during which BI losses are measured - from the interruption trigger through financial normalisation, subject to the maximum indemnity period (MIP) in the schedule.
Can recovery extend beyond physical reinstatement?
UK gross profit BI often allows financial recovery after operations resume where turnover and margin remain depressed. Experts correlate marketing spend, order books, and sector benchmarks to justify the horizon, capped by the MIP.
How do experts evidence the end of the indemnity period?
They track when actual gross profit trend converges with a defensible but-for path, document partial-capacity trading, and contrast engineering reinstatement dates with financial normalisation milestones.
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