Business Interruption Claims: Average Approaches $1 Million
By Don Jergler
October 14, 2026
The average cost of a business interruption claim is rapidly approaching $1 million, driven by various factors, as highlighted in a recent report.
Key Findings
- Rising Costs: The average BI claim exceeded $950,000 between 2021 and 2025, a 70% increase compared to the property damage average.
- Frequency vs. Value: While claims frequency has remained steady, the average claim value has risen by over 30% annually in the past two years.
- Top Causes: Fire and explosion accounted for over 40% of the total claim value, while natural catastrophes and machinery breakdown contributed significantly.
- Supply Chain Vulnerabilities: Concentrated production and geopolitical tensions, such as the wars in Ukraine and Iran, are straining supply chains and driving up costs.
- Tariff Impact: Import tariffs on essential materials, like softwood lumber, are inflating rebuild costs and causing delays.
- Post-Pandemic Effects: The lingering impact of COVID-19 may have also contributed to higher business interruption claims.
Insights from Allianz Commercial
Melissa Hill, North American head of claims for Allianz Commercial, emphasizes that while claims frequency hasn't increased, each claim is becoming significantly more expensive. She attributes this to prolonged downtime due to fragile supply chains and compounding inflation.
"What we’re seeing isn’t necessarily more claims — it’s that each claim is getting significantly more expensive," Hill notes.
Complexities and Expenses
Christopher J. Boggs, president of Boggs Risk & Insurance Consulting, suggests that the COVID-19 pandemic's aftermath may have contributed to higher business interruption costs, adding to the complex landscape of claim adjustments.