A plant catches fire two countries away. A single key supplier goes dark. A typhoon keeps guests from booking your hotel, without a window so much as cracking. None of these touch your own property directly — and that is exactly the problem, because most business interruption cover is still built to respond only when your own property is physically damaged.

The losses are getting larger

Across more than 2,300 claims analysed between 2017 and 2021, the average business interruption claim reached over €3.8 million, up from €3.1 million in the preceding five years. For claims above €5 million, the BI component roughly doubled the value of an equivalent property-damage-only loss. After the 2021 Texas Big Freeze, contingent business interruption claims more than tripled the volume of the previous three years combined.

Where standard policies stop

Property damage business interruption (PDBI) cover is built around a simple test: was there physical damage to insured property? That test misses a growing share of real losses — a supplier’s outage, a port closure, a demand shock with no physical trigger at all. At the same time, insurers are raising deductibles and pulling back capacity on peak perils, widening the gap further.

A complementary answer: parametric cover

Parametric insurance pays out when an independent index — wind speed, rainfall, a traffic or footfall measure — crosses a pre-agreed threshold, with no loss adjustment process to wait on. Settlement often lands within about 30 days. It is not a replacement for PDBI; it is a way to reach the losses PDBI was never designed to cover, particularly for non-damage and supply-chain-driven disruption.

If your last business interruption review only asked “what happens if our building is damaged,” it is worth asking the harder question: what happens when everything around your building stops working instead. Your BTTN advisor can help map that exposure and where parametric or contingent cover belongs alongside your existing programme.