How long it takes to come back from disaster is addressed in this article as we examine the proper approach to the measurement of BI period length. There are four distinct and important rules that should be followed, including the rule regarding and the insurer acting to delay the BI period by not making sufficient partial payments. This delay is included in the BI period. When you verbalize and apply these four rules, the case law is astonishingly consistent and harmonious.
Sometimes a policy holder does not repair its damaged property when the property is not actually repaired; such as, when it is a total loss and the policyholder decides to rebuild somewhere else, if the damaged property is condemned, or when the unrepaired property is sold but no assignment has been given to the insurance rights. When we encounter the situation wherein the repairs will not occur, then we must extrapolate the time it would take under normal circumstances to complete the repairs and return the location to its original business levels.
Should the property actually be repaired, as is often the case, then the presumptive BI period is the amount of time it actually took to make the repairs. As explained by the Dileo court a rebuild versus a no rebuild scenario is stated "the only difference is that in the (rebuild) case (the) proof is governed by the time actually and necessarily taken to restore the business, while in the (no rebuild) case (the) proof is governed by estimates." 248 N.E.2d at 676 In actuality, the language of the BI policy states, "actual loss sustained," thus directing that any actual interruption period be used for calculating the BI loss.
When the insurer caused delay and not the policyholder, then the BI period will include those delays. One reason that an insurer might hold up repairs is because it is taking longer to obtain approvals for work or contractors. On the other hand the insurance adjuster may not be attentive to the public claim. Often repairs are not completed in a timely manner because the insurance company has not paid enough up front and the owner does not have the money to proceed. Insurers control when and how much money is supplied which can cause a delay since money is the key factor for the completion of any repair job. To sum up, this arrangement insures that either extra BI reflecting policyholder delays or less BI when the insurer delays are administered even-handedly. Both of these rules, alike, are reasonable and adequate.
The BI period additionally includes further time where delay is neither the fault of the policyholder nor the insurer but instead is due to a factor beyond the control of either entity. Such examples are, code officials, contractors, or subcontractors. The policyholder's coverage should not be affected when a third party causes the delay. This type of delay is the fault of neither the policyholder nor the insurer. Contractor delay is the most common example of this. To give another example, the policyholder running a retail store in the premises of a shopping complex, which is damaged and repairs to the store could proceed sooner, but are delayed because repairs to the larger shopping mall have failed to yet be completed.