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Quantifying Loss

Calculating business income loss claims can be tricky.

By Russ Matheson | Updated on May 28, 2008

Calculating business income loss claims can be tricky. To achieve an accurate outcome, claim professionals must understand what makes a business tick and be comfortable working with business records. An added complexity is the inherent difference between accounting terms and insurance policy language, especially as they relate to business income terminology.

From an accounting perspective, business income loss calculations are dependent upon a number of factors. Even though these factors can be complicated to resolve, claim professionals can become more confident and more proficient in adjusting this type of claim by familiarizing themselves with four key elements: the period of restoration; sales projection; mitigation; and expense projection. A clear understanding of these elements and how they impact business income loss calculations will go a long way towards the efficient resolution of these losses.

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