Business Interruption Loss Calculator

Business interruption insurance (also called business income coverage) pays for lost net income and continuing operating expenses during the period your business is suspended due to a covered property loss. Continuing expenses can include rent or mortgage, payroll, insurance, loan payments, utilities, and other costs that continue while you are closed. On the standard ISO form (CP 00 30), the suspension must be caused by direct physical loss of or damage to property at the premises described in your policy, from a covered cause of loss, so downtime without that kind of damage is not covered under the main insuring agreement.

The top-down formula is: lost revenue during the period of restoration, minus expenses saved because of the shutdown, minus the business income for the waiting period (72 hours on the standard ISO form), plus any extra expenses incurred because of the loss. The bottom-up (net income) method adds the net income you would have earned to your continuing operating expenses; given the same inputs, both produce the same number. Accurate calculation requires your pre-loss P&L, trailing 12-month revenue, fixed vs. variable expense classification, and a documented period of restoration.

The period of restoration is the length of time the BI coverage pays on. On the standard ISO form (CP 00 30), it begins 72 hours after the direct physical loss or damage for Business Income (immediately for Extra Expense) and ends on the earlier of the date the property should be repaired, rebuilt or replaced with reasonable speed and similar quality, or the date the business resumes at a new permanent location. The form sets no fixed month cap; your Business Income limit caps the payout. Its Extended Business Income coverage adds up to 60 consecutive days after operations resume, while revenue returns to pre-loss levels.

Yes, but which payroll depends on the policy and your choices. On the standard ISO form (CP 00 30), Business Income includes continuing normal operating expenses, including payroll. An optional ISO endorsement (CP 15 10, Payroll Limitation or Exclusion) can limit payroll coverage to a set number of days or exclude it for some employees, so check your declarations and endorsements. Expect the carrier to ask what each employee did during the shutdown, and keep records that show it.

Continuing expenses are fixed costs that keep running whether you're open or closed — rent, insurance, loan payments, salaried payroll, property taxes, essential software. These are reimbursable under BI coverage. Saved expenses are variable costs that stop when you shut down — raw materials, inventory costs, hourly wages for furloughed staff, shipping, variable utilities. These reduce the claim because you didn't actually spend the money. Classifying every expense on your P&L as continuing or saved is a key part of a BI claim.

Yes. Disputes on business income claims can turn on projected revenue that ignores growth trends, saved-expense figures higher than what the business actually stopped spending, a shortened period of restoration, whether certain payroll was truly "continuing," and whether extra expenses were necessary. A claim backed by financial records and, on larger losses, a forensic accounting workup gives you the documents to answer each point. A licensed public adjuster can document and negotiate the claim for you; see our business interruption claim page.

Yes. The formula used by this tool applies to businesses of any size — a restaurant, retail store, medical practice, manufacturer, or HOA with a damaged clubhouse all use the same calculation framework. The accuracy of the estimate depends on the quality of the numbers you enter. For smaller businesses without a formal P&L, the trailing 12-month bank deposit totals and accounting-software expense reports are a reasonable starting point. For larger or disputed claims, a CPA or forensic accountant can build the documentation the carrier will review.