Business interruption claims – the complexities of quantifying losses

Cyber-attacks are one of the most dynamic and crippling threats businesses face. The UK’s economy accounted for 25% of European cyber-attacks in 2025. Perhaps the most recent and significant of which is the attack on Jaguar Land Rover (JLR) which halted production for over a month. Estimates of the financial impact vary wildly and should be treated with caution; however, it doesn’t take a forensic accountant to conclude that it has had a huge financial impact on JLR and its network of suppliers. 

Cyber insurance – a growing market

Considering the growing risk of a cyber-attack, more and more companies are looking to protect their business through cyber insurance. The insurance market is developing and is not immune to disputes between policy holders and their insurers. Policies can vary significantly in terms of cover provided, such as indemnity periods and types of loss covered, policy exclusions, and inconsistent or insufficient definitions of key accounting terms.
  
Whilst cyber-attacks are a constantly evolving category of threats, the financial damage they inflict on businesses is easier to characterise. Typically falling into one of several categories, such as lost revenue, fines, third-party claims, and the cost of remediating affected systems. According to Allianz, business interruption costs account for over 50% of cyber claim values. 

Quantifying business interruption claims – a complex area

At Quantuma, we have significant experience in supporting businesses which have suffered an interruption event, both in terms of quantifying losses and subsequent negotiations with insurers.

Quantifying business interruption claims can be complex; simply deducting the profit shown in one year’s accounts from the year before is unlikely to reflect the losses which can be recovered through the insurance policy. Complexity can arise from the policy definition of ‘loss’ which may not align with how income and costs are shown in the company’s accounts. In our experience, discrepancies in definition, classification and application of accounting treatments alone can significantly impact the quantum of a claim. 

Other factors at play affecting a business’s performance

More broadly, a company’s financials are subject to a wide range of policy decisions and economic factors. For example, JLR’s most recent quarterly sales publication (i.e the quarter in which the cyber incident occurred) states that results were also influenced by a wind-down of legacy jaguar models, US tariffs, and the altering of model mix towards more profitable models. Wider factors, such as those noted by JLR, complicate determining the impact on the company’s performance of the cyber-incident alone. A key aspect of any business interruption claim is disentangling the losses arising from the insured event from other trends and phenomena shaping the business’s fortunes. This should be done in a structured and thorough manner such that the loss figure calculated is, in fact, solely attributable to the event in question and able to withstand significant scrutiny.  Keeping clear and comprehensive business records, in respect of historic trading, throughout the affected period and following it, is vital and will support conclusions reached regarding a claim’s existence, causation, and duration, allowing evidence-based parameters around the claim to be set. It is likely these conclusions and parameters will be ‘structural’ to the claim and exert significant influence over quantum, therefore the reliability of the information these are drawn from will hugely influence the integrity of the claim. High-quality business records are something all businesses should aspire to, and the earlier such records are analysed the more effectively costs and expectations can be managed. 

Preparing a robust insurance claim

As shown by recent events, the capacity of cyber-attacks to interrupt business is extensive and highly prevalent in the UK. Cyber insurance is developing and seeking appropriate legal advice regarding policies and making a claim is essential. 

Constructing a claim requires rigorous interrogation of the insurance policy, the circumstances of the business and the interruption event. The claim’s meaningfulness will hinge on how the detail within the insurance policy has been applied and how robustly causation can be linked to the quantum, much of which will depend on the quality of information available. In our experience, it is always better to forward a credible and well evidenced claim than put forward something overly optimistic that risks embedding skepticism moving forward.