Companies are increasingly at risk from surging business interruption losses due to concentrated production, fragile supply chains, geopolitical tensions, inflation, and growing technology dependencies. New claims analysis from Allianz Commercial shows that the average total value of a business interruption claim now exceeds €850,000. This is around 70% higher than the corresponding average property damage claim of close to €500,000, demonstrating that the financial consequences of being unable to operate can substantially exceed the cost of repairing the damage that caused the disruption.
Allianz's report analyzes 7,888 business interruption insurance industry claims with a total value of approximately €6.74bn, or US$7.82bn, from Jan. 1, 2021, to Dec. 31, 2025. Although claims frequency has remained relatively stable, the average value of claims increased by over 30% annually during the past two years.
Fire is the dominant cause of loss
Fire and explosion is the costliest cause of business interruption claims, accounting for more than 40% of the total value analyzed, equivalent to approximately €2.9bn, or US$3.3bn. Fire was responsible for nine of the 10 costliest man-made business interruption events in the dataset and was the most expensive cause of loss in markets including Germany, Singapore, the UK and the US. One case illustrates how losses can escalate beyond the original incident: a fire at a small manufacturing unit caused relatively limited physical damage but severely disrupted downstream operations, ultimately resulting in a nine-figure group-wide business interruption loss.
Natural catastrophes are the second-costliest cause, representing 34% of the value of claims analyzed, and the most frequent, accounting for 26% of claims. Together, fire and explosion and natural catastrophe events generated more than 75% of total claim value.
However, non-natural catastrophe events – such as fires, water damage and machinery breakdown – remain the principal overall business interruption loss driver, accounting for 74% of claims and 66% of their total value.
Recovery is taking longer and costing more
Some natural catastrophe claims are developing over increasingly long periods. Almost two years after Hurricane Helene in September 2024, many associated business interruption claims remain unresolved, not due to coverage issues, but because some businesses have taken that long to recover. Supply chain delays, labor shortages, and volatile material costs can extend both recovery and settlement.
Concentrated production is also amplifying losses. Industries can depend on a limited number of specialist sites, suppliers, or regions for critical materials and components, allowing a fire, cyber incident, or extreme weather event at one location to cascade through global supply chains. The two costliest non-natural catastrophe events in the analysis involved fires at semiconductor factories.
Cyber disruption broadens the risk landscape
While ransomware remains the leading cyber-related cause of disruption, a growing share of loss activity is also being driven by cloud outages, software failures and incidents at third-party technology providers. More than 48,000 outages were tracked across hundreds of cloud and software services in 2025 alone, according to outage tracker IncidentHub, highlighting businesses' rising dependence on digital supply chains.
High-profile incidents, including attacks on software providers and logistics platforms, demonstrated how a single cyber event can disrupt thousands of organizations simultaneously – one attack on a US automotive software provider caused a weeks-long outage for around 15,000 car dealerships. As companies become more reliant on cloud services, AI and third-party technology providers, cyber-related business interruption is becoming a more significant and complex source of loss.
Loss prevention and preparedness: the way forward
In today's connected environment, the severity of a business interruption loss is not always determined by the extent of physical damage. This underlines the need for robust business continuity planning, including the identification of critical production units, key dependencies and contingency arrangements to limit the impact of a localized disruption. More companies are now requesting risk surveys of key third-party suppliers – a practice well established in the automotive sector but increasingly adopted elsewhere.
In my work with clients, the gap I see most often is not awareness but follow-through. Many organizations have mapped their key suppliers, yet far fewer have quantified how long each critical site, supplier, system or technology provider would take to restore – or tested their business continuity plan against that scenario. The claims experience in the report bears this out: outcomes are materially better where business continuity plans are realistic and tested, and where business interruption values are reviewed regularly so that inflation does not quietly erode cover.
For cyber-related business interruption, early detection and rapid response are the most effective loss reduction levers. Companies that detected and isolated cyber incidents early, prioritized revenue-critical systems and accepted temporary operating modes were able to shorten their effective business interruption period by days or even weeks. Tabletop exercises – essentially "fire drills" for cyber incidents – have also proven highly effective.
However, the report cautions that while many companies have invested in supply chain transparency and dual sourcing since the Covid-19 pandemic, tangible risk improvements – such as enhanced fire protection or increased inventory buffers – have been limited and not consistently applied across companies, sectors and countries. The report emphasizes that even modest investments in fire protection and natural catastrophe prevention for critical assets can significantly reduce business interruption exposure.
To read the full report, please visit: Business interruption claims | Allianz
