The insured took this example further and said he called a tenant to come move in and the tenant has already found another place to live. He then had to advertise for a tenant and there are nine other dwellings on his street that are available for rent. He cannot rent the space, and without the initial loss, he would probably have had the tenant for many years.

We do not think we owe the insured $78,000+. What are your thoughts?

Georgia Subscriber

The insured is owed the actual business income lost due to the suspension of business during the period of restoration (and any extended coverage period that may apply according to the particular policy's terms). This would not include future expected income from the customers who rented storage space prior to the loss.

 The insuring agreement from the portion of the BOP pertaining to business income states, "We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your operations during the 'period of restoration.'" "Business income" is defined as "net income (Net Profit or Loss before Income Taxes) that would have been earned or incurred if no physical loss or damage had occurred." But, as stated earlier, the policy owes for the loss of income only during the period of restoration, which is the period that begins seventy-two hours after the time of loss and ends when the property should be repaired or replaced with reasonable speed and similar quality or when business resumes, whichever comes first. This does not include losses incurred after business has resumed or the property should have been repaired except for the up to thirty days of extended business income coverage the BOP provides that begins on the date the property is actually replaced and business resumes. Beyond that time period, the policy does not provide coverage for business income losses.