OPERA – MARSH’S REPORT ON BI COVERAGES & TRENDS

Marsh’s BI team made a presentation to OPERA on 9^th March 2021 entitled BI Coverages and Trends for the Energy Industry.

Losses due to business interruption are, on average, 3 times the associated physical damage loss, and there are calls for risk engineering surveys to devote more time to business interruption risks. It is, however, important to remember that business interruption losses are triggered by physical damage losses and so physical damage risks are critical. Furthermore, business interruption loss calculations are transitory (they can change very quickly, if, say the crude oil price increases/decreases significantly) and their determination can be highly complex (hence forensic accountants are employed after losses). As such, detailed calculations of business interruption losses following surveys are rarely of great benefit.