Business Interruption Recovery Gap Calculator

BI coverage has limits. Gaps hit NOI.

Annual rent

BI coverage limit

Actual downtime months

Indemnity period months

BI recovery gap

$1,000,000

Covered rent loss

$1,800,000

Actual rent loss

$2,800,000

How the math works

Actual loss = monthly rent × downtime months. Covered = min(actual, indemnity × monthly, dollar cap). Gap = actual − covered.

$200k/mo × 14 mo = $2.8M actual. Covered = min($2.8M, $2.4M 12-month cap, $1.8M dollar cap) = $1.8M. Gap $1M — major under-insurance.

How to Use

Enter annual rent.
Enter BI coverage amount.
Enter actual downtime months.
Enter indemnity period months.
Read coverage gap.

Frequently Asked Questions

How is BI measured?

BI pays lost income during restoration = rent during downtime (less variable costs not incurred). Capped by policy limit AND indemnity period. Gap appears when either cap is hit — policy limit (dollar cap) or indemnity period (time cap).

Indemnity period?

Usually 12-18 months. Extended BI (EBI) adds 6-12 months post-reopening for ramp-up income loss. Both caps together may hit first — read policy carefully. Large-complex property owners often buy 24+ months of BI with extended indemnity.

Typical gaps?

Hurricane Ian loss to luxury resort: $3M BI cap hit by month 14; actual restoration took 22 months with $2M additional lost rent. Commercial restoration on retail: 18-month policy, 22-month actual. Buyers often under-insure BI thinking standard is enough.