A business interruption insurance policy does not automatically cover all turnover lost after an incident. First, the business interruption must fall within the insured cover. Then the loss, saved costs, additional costs and indemnity period are calculated in accordance with the policy. If your claim is rejected or the payout is low, ask for separate reasoning on both the cover and the financial calculation.
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Written by Onur Arslan, attorney at Arslan Advocaten. Registered in the specialisation register of the Netherlands Bar for employment law and personal injury. Onur Arslan practised for many years as a corporate lawyer and insolvency trustee (curator) and has extensive experience in financial law disputes. Last updated: 22 September 2026.
After a fire or water damage, rent, wages and other expenses often continue while turnover falls. Your buildings or contents insurance does not necessarily fill that financial gap. That is precisely where business interruption insurance can be relevant. A watertight claim links the physical incident to the demonstrable consequences for your business operations.
What is the difference between material damage and business interruption loss?
Material damage concerns, for example, damaged premises, machinery or stock. Business interruption loss concerns the financial consequences of disruption to your activities. A business may have separate cover for both, with different conditions and limits.
The government information on Ondernemersplein about business interruption insurance stresses that the policy determines which causes and periods are insured. A mere drop in customer demand is different from an interruption caused by an insured event.
So check which event triggers the business interruption cover. Is insured material damage required? Are damage at suppliers, loss of access or failure of utilities covered only through an extension? The answer must follow from your own policy terms.
Loss of turnover is not the same as the payout
The turnover you miss out on may include costs that you do not incur because of the interruption. Think of purchasing, consumption or other variable costs. The insured concept of gross profit or gross profit margin may also differ from the term used in your annual accounts.
A worked fictitious example shows where the starting point ends and the payout begins. Assumptions: a manufacturing business is hit by fire on 1 March; the policy has an indemnity period of twelve months and the interruption lasts from 1 March up to and including 31 August (six months, the highlighted example period). The deductible is € 5,000.
| Step | Explanation | Amount |
|---|---|---|
| 1. Lost turnover over the example period | 1 March to 31 August inclusive, based on the reference period of the previous year, adjusted for seasonality and growth | € 100,000 |
| 2. Less: saved variable costs | Purchasing, consumption, energy and other costs you did not incur because of the interruption; the policy states which items these are | − € 40,000 |
| 3. Lost gross profit | This is the starting point of the calculation, not yet the payout | € 60,000 |
| 4. Plus: additional costs to mitigate the loss | Temporary production site € 9,000, express transport € 2,500, hired staff € 3,500. Only reimbursed to the extent that they prevented more loss than they cost | + € 15,000 |
| 5. Less: part that did not contribute to mitigation | Part of the temporary site turned out not to be necessary | − € 3,000 |
| 6. Less: reduction for underinsurance | The insured value was set at € 480,000 while € 600,000 would have been correct: 480/600 = 80%. The proportional reduction applies to the gross profit, not to the additional costs | − € 12,000 |
| 7. Less: deductible | As stated in the policy schedule | − € 5,000 |
| 8. Payout | What is actually paid | € 55,000 |
So ask the loss adjuster to show, step by step, which costs were deducted and why, and over which period the calculation was made.
So ask the loss adjuster for a traceable calculation. It must be clear which costs were deducted and why. Prevent costs from being counted both in the margin and again as a saving.
How do you prove what your turnover would have been without the incident?
Historical figures are a starting point, but may give an incomplete picture. A seasonal business, a growing company or a newly opened branch requires additional substantiation. Gather monthly figures, order books, bookings, contracts, budgets and specific information about capacity.
Also record negative factors unrelated to the incident, such as the loss of a major customer. A credible calculation distinguishes between loss caused by the insured event and developments that would have occurred anyway. An optimistic budget from before the fire is not always sufficient on its own.
For a start-up, specific orders and demonstrable market activity can help. Show how turnover expectations were built up and which assumptions are uncertain. A transparent range may be more useful than a single unexplained amount.
How long does the indemnity period last?
The insured period may be limited. Check when it starts, what maximum duration applies and when, under the policy, business operations are deemed to have recovered. Reopening the premises and full recovery of turnover do not necessarily happen on the same day, but that does not mean the cover continues indefinitely.
Delays caused by permits, material shortages or repair scheduling can lead to disputes. So keep a progress file. Note when quotes were requested, parts ordered, decisions taken and work carried out. Distinguish between the necessary repair time and a voluntary expansion or modernisation.
Additional costs to mitigate the loss
Temporary business premises, outsourcing, hired equipment or overtime can limit the interruption. Whether those costs are reimbursed, and up to what amount, depends on the cover. Ask for written consent in advance where possible and explain how much loss the measure prevents.
An insurer may take a critical view of costs that exceed the loss avoided, unless broader additional costs cover applies. So make a brief comparison between doing nothing and the proposed measure. Keep invoices and record which production or turnover was actually preserved.
Checklist: financial documents and recovery planning
A business interruption claim is assessed on figures. Have these documents ready before the first meeting with the loss adjuster; this shortens the process considerably and prevents the adjuster from filling in the assumptions himself.
- Annual accounts for the last three years: including the breakdown of the gross profit margin.
- Monthly turnover figures for the reference period and the same period last year: this is the basis for the lost turnover.
- Substantiation of seasonal pattern and growth: order portfolio, quotes, contracts, marketing campaigns that were already running.
- Breakdown of variable and fixed costs: for each item, ask: has this cost actually ceased because of the interruption?
- Payroll records: who kept working, who did not, and was any scheme used?
- The policy schedule and the conditions: with the indemnity period, sum insured, accretion (accres), premium adjustment (naverrekening) and deductible highlighted.
- The most recent premium adjustment declaration: and proof that you submitted it on time.
- Invoices for loss mitigation measures: with a short note per measure: what did it cost, and what loss did it prevent?
- A recovery plan with dates: when will production partially resume, when fully, and what does that depend on (delivery time of machines, permit, staff)?
- Correspondence with customers who have left: this shows whether turnover returns immediately after recovery or only later.
- Overview of what you received elsewhere: from other insurance policies, a tenant, a contractor or a scheme.
When planning, note the difference between physical recovery and recovery of turnover: your machines may be running in June while your customer base only returns in October. Meanwhile, the policy’s indemnity period keeps running, and that is often the core of the dispute.
Underinsurance and an incorrect declaration
An insured value that is too low or a declaration that has not been updated can affect the compensation. Check the reference period, the chosen indemnity period and any accretion or premium adjustment arrangement. Two concepts that are often left unexplained in policy conditions:
- Accretion (accres): a percentage uplift by which the sum insured automatically grows with expected turnover growth, so that you do not have to adjust it manually every year. If, for example, there is an accretion of 10%, the assessment of underinsurance is based on the sum insured plus 10%.
- Premium adjustment (naverrekening): you declare an estimate of the gross profit and pay premium on that basis; after the end of the year you provide the actual figures and the premium is adjusted. The advantage: if the actual gross profit is higher, you are then not underinsured, provided that you actually submit the declaration.
Look up both concepts in your own policy conditions and on the policy schedule; they are usually found under “sum insured”, “premium calculation” or “duty to declare”. Always submit the premium adjustment declaration within the set period: if you do not, you lose the very protection the arrangement offers. The system for business interruption is not simply the same as that for a private home.
If a reduction is applied, request both the policy basis and the figures. Strong turnover growth does not automatically cause underinsurance under every policy, but it may be relevant. Also read underinsured after a loss.
What should you do if the insurer does not pay?
First have it established whether the cause, the cover or the amount of the loss is disputed. Then put together a file with the policy, clauses, loss adjuster’s reports, financial records and the recovery plan. Ask for an advance payment on demonstrable, undisputed loss if your cash flow is under pressure.
An accountant can explain the financial assumptions; a loss adjuster can carry out the policy calculation; a lawyer can assess the cover and the legal dispute. Agree clearly which question each of them will examine, so that the reports are consistent with one another.
With business insurance, access to Kifid, the Dutch Financial Services Complaints Tribunal, is not a given. Civil proceedings or a negotiated settlement may be necessary. In urgent cases, it must be assessed whether a provisional measure (voorlopige voorziening) is appropriate. A shortfall in turnover alone does not give a right to immediate payment without sufficient substantiation.
Business interruption and the covered event
Business interruption insurance does not automatically cover every loss of turnover. Check which event triggers the cover, whether material damage is required and which indemnity period applies. Loss of turnover, loss of gross profit and additional costs are different calculations.
Compare the actual figures with a substantiated scenario without the loss. Take into account saved costs, seasons, substitution and other causes. Ask why the insurer does not include certain repair or bridging costs.
Also read about valuation and underinsurance, cyber cover and overlapping insurance.
Frequently asked questions about business interruption insurance
Is lost turnover always fully insured?
No. The policy determines the basis of calculation. Saved costs and other adjustments may be taken into account. Distinguish between gross turnover, gross profit as defined in the insurance and the final payout.
Are wages and rent insured if the business is closed?
They may form part of the insured financial interest. That depends on how the policy is structured and on the calculation. Do not count the same costs twice on top of a claim already based on gross profit.
Am I insured if only my supplier has a fire?
That often requires a specific extension for dependency on suppliers or customers. Check whether that extension exists, which businesses or risks it covers and what maximum applies.
Do I have to rent a temporary location?
Not automatically. Discuss a reasonable approach to mitigating the loss with the insurer. Have the financial consequences, practical feasibility and reimbursement of additional costs recorded in advance.
What if my business has only just started?
In that case, a long history of figures is sometimes lacking. Specific orders, bookings, investments and substantiated forecasts can help. The policy and the evidential value of the available data remain decisive.
Can an indemnity period that is too short be an advisory error?
It may be a reason to investigate the advice given, but it is not automatically an error. The assignment, risk inventory, warnings and your own choice must be assessed.
Discuss the cover and the financial substantiation
Is your business getting into difficulty because an insurer is not paying? Contact Arslan Advocaten. If incorrect advice may be involved, read about errors by an insurance adviser.
Legally reviewed by Onur Arslan, attorney at Arslan Advocaten. Reviewed on 13 September 2026.
Further reading on this topic
- Fire damage, but the insurer will not pay: what can you do?
- Car stolen, but the insurance will not pay: what can you do?
