Business Interruption

Defining Coverage, Scope, and Legal Foundations

Business Interruption refers to the financial impact resulting from a temporary halt or slowdown in operations caused by physical or external events.
While it is commonly linked to property damage, modern interpretations also include losses from cyber incidents, pandemics, and regulatory shutdowns.

Our attorneys help clients navigate the nuanced language of insurance policies and contractual terms to determine when business interruption coverage applies and how to substantiate claims.
We provide clarity on the often-contested issues of causation, time limits, and the definition of “direct physical loss.”

Maximizing Policy Value through Strategic Advocacy

Insurance policies covering Business Interruption often involve complex calculations, exclusions, and procedural requirements.
We assist clients in interpreting coverage terms, identifying applicable extensions, and documenting losses consistent with policy definitions.

Our lawyers negotiate with insurers, prepare proofs of loss, and pursue litigation when necessary to compel payment.
We also advise on contingent business interruption (CBI) coverage for losses resulting from disruptions to key suppliers or customers.

Maintaining Continuity in Complex Global Operations

Globalized supply chains create interdependencies that amplify the effects of disruption.
Our Business Interruption team works with manufacturers, distributors, and logistics companies to assess risk exposure and develop continuity plans.
 

We draft and review supply contracts, force majeure provisions, and indemnity clauses that protect against prolonged shutdowns.

When disruptions occur, we represent clients in contract claims, insurance recovery actions, and cross-border disputes involving suppliers or buyers.

Addressing Force Majeure, Delay, and Termination Risks

Business disruptions often lead to disputes over whether contractual obligations must still be performed.
Our Business Interruption practice interprets and enforces force majeure clauses, impossibility defenses, and termination provisions.
We counsel both buyers and sellers on suspension rights, liquidated damages, and renegotiation strategies during prolonged shutdowns.

Our lawyers also draft updated contractual frameworks that anticipate modern risks such as pandemics, cyberattacks, and global transport delays.

Pursuing or Defending Claims in High-Stakes Disputes

When insurers deny coverage or counterparties dispute performance obligations, litigation may be unavoidable.
Our Business Interruption lawyers litigate coverage disputes, breach of contract claims, and recovery actions in state and federal courts.
 

We integrate forensic accounting, expert valuation, and financial modeling to demonstrate loss causation and quantify recoverable damages.

We also assist clients in alternative dispute resolution (ADR) through mediation and arbitration to achieve prompt, cost-effective outcomes.

Accurate Assessment of Loss for Insurance and Legal Recovery

Quantifying Business Interruption loss is both an art and a science.
Our team collaborates with forensic accountants, economists, and actuaries to calculate lost income, extra expenses, and time-based damages.
We validate assumptions, examine historical performance, and ensure alignment with policy definitions of “net income” and “operating expenses.”

By producing defensible loss calculations, we help clients present credible claims and withstand insurer or court scrutiny.

Responding to Digital Crises with Legal and Technical Precision

Modern businesses rely on interconnected digital systems, and IT disruptions can instantly cause Business Interruption losses.
Our lawyers handle claims arising from ransomware attacks, cloud service outages, and data breaches.
We advise on cyber insurance coverage, notification requirements, and recovery of system restoration expenses.

We also coordinate with cybersecurity specialists to ensure technical and legal measures align, mitigating regulatory exposure under data protection laws.

Navigating Public Orders and Regulatory Closures

Government-mandated shutdowns—whether due to health emergencies or environmental hazards—raise complex Business Interruption questions.
We interpret and apply civil authority coverage clauses that may trigger insurance benefits when access to premises is restricted.
 

Our team also advises on compliance with emergency regulations and communication with government authorities to minimize liability.

We represent clients in administrative hearings and appeals related to denied coverage or government-imposed restrictions on operation.

Addressing the Legal Aftermath of Large-Scale Disasters

Environmental incidents such as chemical spills, explosions, or flooding can halt operations and create overlapping claims for property, environmental liability, and Business Interruption.
We assist companies in coordinating insurance recovery, regulatory compliance, and remediation obligations.
 

Our lawyers ensure that operational downtime and cleanup expenses are fully accounted for in loss recovery strategies.

We also liaise with regulators under frameworks such as CERCLA, the Clean Water Act, and state environmental laws to resolve liability while restoring operations.

Building Sustainable, Resilient Operations

Investors and regulators now view Business Interruption resilience as part of corporate governance and ESG (Environmental, Social, Governance) accountability.
We advise companies on integrating continuity planning, insurance optimization, and disaster preparedness into their ESG strategies.
This includes sustainability-linked insurance programs, green resilience bonds, and disclosure of operational risk mitigation efforts.

By embedding resilience into governance frameworks, companies strengthen both stakeholder confidence and long-term stability.

Coordinated Response from Incident to Recovery

Our crisis management lawyers assist clients in immediate post-disruption response—preserving evidence, communicating with stakeholders, and mitigating reputational damage.
We design internal response protocols that align legal, operational, and insurance strategies.
We also advise boards and management on fiduciary duties during crises, ensuring compliance with disclosure obligations to investors and regulators.

By coordinating legal and operational recovery, clients maintain control of the narrative and reduce the risk of litigation escalation.

Cross-Border Risk and Recovery in Multinational Enterprises

For multinational corporations, Business Interruption risks extend across jurisdictions with varying legal and insurance regimes.
We assist clients in harmonizing global coverage, aligning risk allocation in contracts, and resolving multi-jurisdictional disputes.
Our lawyers coordinate with foreign counsel to manage claims under foreign law, ensuring compliance with local regulatory frameworks.

We also evaluate international supply chain dependencies and assist with cross-border recovery and arbitration proceedings.

Proactive Legal Planning and Risk Mitigation

Prevention is the foundation of resilience.
Our Business Interruption practice provides preventive counsel to identify vulnerabilities in operations, contracts, and insurance programs.
We conduct risk audits, policy reviews, and scenario-based simulations to strengthen continuity planning.
We also train executives and risk managers on legal obligations during and after disruption events.

Through proactive planning, we reduce potential losses, expedite recovery, and enhance overall business confidence.

Strategic Counsel. Global Insight. Proven Recovery.

At SJKP LLP, we see every Business Interruption not as a setback, but as a test of resilience.
Our lawyers combine insurance, litigation, and regulatory experience to deliver end-to-end solutions—from claim recovery to policy reform.
We partner with clients to restore operations, recover financial losses, and build stronger, more sustainable enterprises for the future.