Last week, Allianz Commercial released a new report examining nearly 7,900 business interruption insurance claims totaling approximately $7.82 billion over a five-year period. 1 The findings caught my attention, particularly as we continue representing property owners and businesses impacted by the January 2025 Los Angeles wildfires.
According to Allianz’s report, the average business interruption claim is approximately 70% larger than the average property damage claim in its analysis. Allianz also found that average business interruption claim values have increased by more than 30% annually over the past two years. This means that the financial consequences of being unable to reopen or operate a business at the same capacity as it was pre-loss can substantially exceed the cost of repairing the physical damage.
Allianz also found that fire and explosion accounted for more than 40% of the total value of business interruption claims studied, making fire the single most expensive cause of these losses. But what I found particularly interesting was Allianz’s discussion of how long it takes businesses to recover following a catastrophe.
The report notes that many business interruption claims arising from Hurricane Helene, which devastated several southeastern states in September 2024, remain unresolved two years later. According to Allianz, this is not necessarily because of coverage disputes, but because recovery can take years due to labor shortages, supply chain issues, and rising construction costs. We are seeing many of these same challenges firsthand in Southern California following the January 2025 wildfires.
Insurance carriers routinely ask policyholders to provide updates on the status of repairs. This is a reasonable request, as policyholders should move forward with repairs or rebuilding as quickly as reasonably possible. However, as the Allianz report recognizes, recovery is not always within a policyholder’s control. Labor shortages, permitting issues, and delays in obtaining construction materials or replacement equipment can significantly extend the process.
One issue I frequently encounter in insurance claims is the tendency to focus primarily on the cost of repairing the physical damage. That is certainly important, but it does not tell the entire story. More than 21 months after the Palisades and Eaton fires, many property owners are still waiting to rebuild or replace damaged equipment, and some businesses have simply closed their doors for good. Even after a building has been repaired, a business may still be unable to resume normal operations. Customers may have relocated, employees may have found other jobs, or essential equipment may remain unavailable. Depending on the insurance policy, these circumstances may affect the amount and duration of a covered business interruption loss.
Of course, business interruption coverage is not unlimited and is often subject to dollar limits, time limits, or both. Every policy is different, and the specific policy language, applicable period of restoration, and reasons for any delays can all affect coverage. Policyholders also have an obligation to take reasonable steps to mitigate their losses.
My takeaway from the Allianz report is simple. Insurance companies recognize that recovery from a major property loss can take years, and the financial consequences can far exceed the cost of repairs. Most business owners are busy running their businesses, not calculating insurance claims. An attorney who regularly handles business interruption losses can help make sure the insurance company is considering the full extent of the covered loss.
1 “Business Interruption Claims – Trends and developments in corporate insurance losses,” Allianz Commercial (October 2026).
