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We have an insured who has a covered loss at a franchise restaurant, which has closed its operation during the period of restoration.

The insured also has an identical restaurant a few blocks away.

We have determined that the restaurant that was affected by the loss has suffered a business income loss. However, the other restaurant's business has picked up due to the closure of the original store.

Based on this information, has the insured sustained a total recoverable loss as a result of this loss? Can we take into consideration the increase of business at the other store? Does it matter if the stores are insured under the same or independent policies?

Ohio Subscriber

It does make a difference if the stores are insured on the same policy or independent policies. If they are on the same policy, then the increase in business at the other store can be taken into consideration because business income is the net income that would have been earned but for the loss. So, if income from the other store is making up some of the difference, that would be factored in. This would not be the case on separate policies, though, because only the net income of the store insured on that policy would be considered.

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