Business Interruption Calculator
Estimate business interruption insurance claims. Calculate lost revenue, continuing expenses, and indemnity period coverage.
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Measuring a Business Interruption Loss
When a fire guts a plant or a storm tears the roof off a warehouse, the building damage is the part everyone sees. The bigger loss is usually the one nobody photographs: the income the business stops earning while it cannot operate. A company can rebuild a wall in a month, but the orders it could not fill, the customers who went elsewhere, and the rent it kept paying on a dark building add up to far more than the drywall. Business interruption coverage exists to make the company whole for that invisible loss, and estimating it correctly is its own discipline.
What the claim is actually replacing
A business interruption claim is not built on lost revenue. That surprises people, but it makes sense once you think it through. Revenue is not profit; a chunk of every dollar a business takes in goes straight back out as the cost of producing it. If a factory is closed, it is not buying raw materials or running machines, so those costs vanish along with the revenue. Paying the business for lost revenue would overpay it for costs it never incurred. Instead, the claim replaces two things: the net income the business would have earned, and the expenses that kept running even though the doors were shut.
The two halves of a normal operation
Every business splits its expenses into two kinds, and a shutdown treats them very differently. Variable costs rise and fall with activity. When the plant stops, they stop too, so they are not part of the claim. Fixed or continuing costs do not care whether the business is open. The rent is due. The core staff you cannot afford to lose still draw a salary. The utility baseline, the insurance, the loan payment, the lease on the equipment that is now idle all keep arriving in the mail. Those continuing costs are the heart of a business interruption claim, because the business is hemorrhaging money on them while earning nothing to cover them.
Why income earned during the shutdown matters
Few disasters shut a business down completely. A restaurant with a damaged kitchen might still sell from a food truck. A manufacturer might run a partial line or fill orders from inventory. Any net income the business manages to earn during the period reduces the claim, dollar for dollar, because the policy is there to cover the gap between normal performance and actual performance, not to pay a business twice. An honest claim subtracts what was still earned. This calculator asks for that figure directly and nets it out, which is exactly how an adjuster will treat it.
Extra expense: the money spent to lose less
Extra expense is the part that rewards good crisis management. These are costs the business would never normally incur, spent specifically to avoid or shorten the shutdown: renting a temporary location, paying overtime to clear a backlog, expediting a replacement machine, air-freighting parts that would normally come by sea. The logic of covering them is sound. If spending fifty thousand dollars to reopen two months early saves two hundred thousand in lost income, both the business and the insurer come out ahead. Extra expense is added on top of the interruption loss because it is money spent on top of everything else, in service of cutting the total.
The period of restoration sets the clock
Everything in the claim is measured over the period of restoration, the time it reasonably takes to repair or replace the damaged property and get back to normal. It starts at the date of loss and runs until the business could resume operations, whether or not it actually chooses to reopen that fast. Get this window right and the claim is sound. Stretch it beyond what repairs reasonably required and an adjuster will push back, because the policy pays for the time the damage caused, not for a slow rebuild or a business decision to stay closed longer. The number of months you enter here drives the entire estimate, so anchor it to a defensible repair timeline.
Reading the estimate
The tool builds the claim the way a forensic accountant would. It projects the net income lost over the restoration period, adds the continuing expenses the business had to keep paying, subtracts the income still earned from partial operations, and adds the extra expense incurred to speed recovery. The result is a defensible starting figure for a claim. Treat it as an estimate to take into a negotiation, not a final settlement, because every real claim turns on documentation: the financial records that prove the baseline, the repair invoices that justify the period, and the receipts that support every extra expense.
Why not just claim lost revenue?
Because revenue includes the cost of earning it, and those costs disappear when the business stops. A company that loses a million in sales did not lose a million in value; it lost the profit on those sales plus the fixed costs it kept paying. Claiming gross revenue would compensate the business for raw materials it never bought and variable labor it never paid. The net income plus continuing expense method is what makes the claim match the actual economic loss.
How do I establish the pre-disaster net income?
From the financial records: profit and loss statements, tax returns, and monthly bookkeeping from the period before the loss. Adjusters and forensic accountants typically look at twelve months or more to establish a reliable baseline and to capture seasonality, since a business that earns most of its money in one quarter has a very different monthly average than the calendar suggests. The stronger your historical documentation, the harder the baseline is to dispute.
What counts as a continuing expense?
Any cost that keeps accruing while the business is shut. The clearest examples are rent or mortgage, salaries of key employees you retain, insurance premiums, loan and lease payments, and the baseline portion of utilities needed to maintain the premises. The test is whether the expense continues regardless of operations. A cost that stops the moment you close the doors, like hourly production labor or raw materials, is not a continuing expense and does not belong in this part of the claim.
Is there a waiting period before coverage starts?
Most business interruption policies have a short waiting period, often forty-eight to seventy-two hours, before coverage begins, similar to a deductible measured in time rather than dollars. Losses in that initial window are not covered. This estimator projects the loss over the restoration period you enter; if your policy has a waiting period, account for it by trimming the covered window accordingly, and confirm the exact terms in your policy.
Should I hire a forensic accountant for a large claim?
For a significant loss, almost always. Insurers use their own accountants to scrutinize the claim, and the methodology, while logical, leaves enormous room for argument over the baseline, the restoration period, and what counts as a continuing or extra expense. A forensic accountant or public adjuster who specializes in business interruption can often recover far more than their fee by documenting the claim properly and defending the assumptions. Use a tool like this to understand the shape of the claim; use a professional to maximize and defend it.
Published: June 2026 · Models the standard net-income method; actual claims depend on policy terms, documentation, and the period of restoration