Business Interruption Claims Surge to €850,000 Average
The average cost of a business interruption claim has surged to over €850,000, marking a 30% annual increase over the past two years, according to Allianz Commercial. This rise comes despite stable claim numbers.
Allianz warns that the financial impact of business interruption now far exceeds the original cost of the disruption itself. Business interruption claims are 70% higher than the average associated property damage claim, which stands at around €500,000.
Fragile Supply Chains and Geopolitical Tensions Drive Costs
An analysis of nearly 7,900 business interruption claims between 2021 and 2025, totaling €6.74 billion, reveals that fragile supply chains, geopolitical tensions, concentrated production, inflation, and growing technology dependencies contribute to rising costs.
“The scale of physical damage alone no longer determines the ultimate cost of a business interruption.” Lillelund says even a relatively contained incident can have consequences across production networks, customers, and markets.
“Businesses therefore need to identify and better understand not only their own critical assets, but also those of the suppliers, technologies and infrastructure on which their operations depend,” he says.
Fire and Natural Disasters Lead Causes of Claims
Fire and explosion are the costliest causes of business interruption claims, accounting for over 40% of all claims analyzed, totaling €2.9 billion. Fire was also responsible for nine of the ten costliest man-made business interruption events, including two fires at semiconductor factories.
Natural catastrophes are the second-costliest cause, accounting for 34% of the value in the dataset. They are also the most frequent, making up 26% of claims, followed by water damage (25%) and fire (21%).
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Allianz Commercial notes that settling business interruption claims after natural catastrophes is taking longer. Many claims related to Hurricane Helene in 2024 remain unresolved as companies struggle to recover fully.
Man-Made Events Dominate Business Interruption Claims
Man-made events accounted for 66% of the value of business interruption claims, while natural catastrophes stood at 34%. Fire and explosion, as previously mentioned, lead the man-made causes, followed by machinery breakdown (6%) and water damage (3%).
Cyber Threats Emerging as Significant Risk
While cyber incidents are not yet among the top causes of business interruption losses, Allianz Commercial warns that they are becoming a significant driver of losses. Business interruption is the single biggest cost associated with cyber claims.
“The initial cost of responding to a ransomware attack and extortion demand can be easily outweighed by the costs of disruption to operations,” says Caitlin Ewing, complex claims analyst, cyber, at Allianz Commercial.
Ransomware is the leading cause of disruption in cyber claims, but Allianz Commercial notes a growing share of loss activity driven by cloud outages, software failures, and incidents at third-party tech providers affecting multiple organizations simultaneously.
Alberto Barani, BI group leader, risk consulting at Allianz Commercial, emphasizes prevention. “Investments in fire protection, natural catastrophe resilience, cyber preparedness and business continuity planning can make a meaningful difference to both the duration and severity of a business interruption loss. Even relatively modest investments can significantly reduce the impact of disruption when it occurs,” Barani says.
