The Length of the Road Back From Disaster: Four Rules For Measuring the Business Interruption Period
Overview
This episode explores one of the most important — and often overlooked — battles businesses face after a disaster: determining how long an insurance company should pay for business interruption losses. Using Gary Thompson’s Adjusting Today analysis as the foundation, the discussion explains how insurers may try to limit payouts by using an idealized “theoretical” rebuild timeline, even when real-world recovery involves permitting delays, contractor shortages, weather, funding issues, and other unavoidable setbacks.
The episode breaks down four key legal principles that help protect policyholders. First, theoretical timelines are mainly appropriate when a property is not actually repaired, such as in a total loss or relocation scenario. Second, when a business does rebuild, the actual time required is generally the starting point for measuring the business interruption period. Third, insurers cannot benefit from delays they caused themselves, especially when they withhold funds, slow approvals, or otherwise obstruct recovery. Finally, delays caused by third parties or widespread disaster conditions — such as labor shortages after hurricanes or a landlord’s delayed repairs in a damaged shopping center — should not automatically be blamed on the policyholder.
Overall, the episode emphasizes that business interruption coverage is meant to reflect messy, real-world recovery — not a perfect-world construction estimate. It encourages business owners to understand their rights, document delays carefully, and push back when insurers try to shorten the recovery period unfairly. The episode closes with a forward-looking question: as insurance companies adopt AI and automated claims processing, courts may eventually have to reconsider what “reasonable delay” means for insurers themselves.