Art and Science of Claims


Adjusting a business interruption claim involves both art and science. There are numbers, yes, but the adjuster must also consider the context in which a business operates.


“The art comes in when we start making projections about what would have happened had the loss not occurred.”


Gerald Kissner, Zurich


Unlike adjusting a claim for damage to tangible property, adjusting a business interruption claim involves projections about what might have been. The numbers may be considered from the top down: gross sales less cost of goods sold less continuing expenses. Or it can be looked at from the bottom up: net profit plus continuing expenses. In either case, the adjuster must consider macroeconomic factors that would affect the insured’s business, its position in the competitive landscape and seasonal production cycles. It’s a matter of tying together the numbers with the story of the business.


Copyright © 2012 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


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