Fire and explosion accounted for more than 40 percent of the value of business interruption insurance claims analysed globally over five years, generating about €2.9 billion in losses, according to Allianz Commercial.
The insurer analysed 7,888 claims valued at approximately €6.74 billion between January 2021 and December 2025, with the findings showing that the financial cost of business interruption can exceed the damage to property itself.
The average business interruption claim exceeded €850,000, about 70 percent higher than the average associated property damage claim of nearly €500,000. Allianz Commercial also reported that the average value of business interruption claims increased by more than 30 percent annually over the past two years.
The claims covered incidents in which businesses suffered financial losses following disruptions to their operations, including damage that prevented production or trading from continuing normally.
Fire was responsible for nine of the 10 costliest man-made business interruption events in the dataset, with electrical faults featuring prominently among the causes of major fire losses.
Natural catastrophes accounted for 34 percent of the total value of claims, making them the second-costliest cause of business interruption losses. Machinery breakdown contributed six percent, while water damage accounted for three percent.
By frequency, however, natural catastrophes represented 26 percent of claims, followed by water damage at 25 percent and fire and explosion at 21 percent. The figures show that water damage generated a relatively high number of claims but accounted for a smaller share of total losses.
In one case cited by Allianz Commercial, a fire at a small manufacturing facility caused limited physical damage but disrupted downstream operations so severely that the resulting business interruption loss reached nine figures across the wider corporate group.
The insurer attributed the cost of business interruption to factors including lost earnings, continuing expenses, supply chain constraints, inflation and delays in restoring operations. It also identified cyber incidents, including ransomware attacks, cloud outages and software failures, as potential sources of disruption.
Lagos market fire highlights business exposure
The findings are relevant to Nigeria, where fires at commercial buildings and markets have destroyed goods and disrupted trading activities.
In December 2025, a fire engulfed the Great Nigeria Insurance House on Martins Street, Lagos Island, spreading to adjoining structures in one of the city’s busiest commercial districts.
Reports in January 2026 indicated that some traders around the Balogun Market area were still facing shop closures and restricted access to parts of the commercial district following the incident.
For affected traders, the financial consequences can extend beyond the value of goods destroyed or damage to their premises. Businesses may lose sales while shops remain inaccessible and continue to face expenses while trying to resume operations.
Allianz Commercial’s report does not separately assess Nigeria or establish the value of business interruption losses suffered by Nigerian businesses. The Lagos incident illustrates the type of disruption that can follow a commercial fire, but does not establish whether affected traders held business interruption insurance or received compensation.
Whether businesses can recover lost income through insurance depends on the cover they purchased, the cause of the interruption and the conditions attached to their policies.
Nigerian insurers offer protection against lost income
A review of product information published by IGI, Prestige Assurance, Anchor Insurance and Sovereign Trust Insurance on their websites shows that the insurers offer consequential loss or business interruption policies designed to cover certain financial losses arising from insured damage to property.
Depending on the policy, protection may include lost gross profit, continuing wages and salaries, auditors’ fees and additional expenditure incurred to minimise the impact of an interruption.
IGI’s Fire Consequential Loss policy, for instance, provides for loss of gross profit and additional expenditure to reduce a fall in turnover. Its published terms also identify cover extensions involving dependent suppliers’ and customers’ premises, subject to policy conditions.
Prestige Assurance lists gross profit, wages and salaries, and auditors’ fees among the items covered under its consequential loss policy. Anchor Insurance’s business interruption product provides for certain continuing expenses and additional expenditure, while Sovereign Trust Insurance describes consequential loss cover as protection against lost productive capacity or earnings following damage covered under an associated fire policy.
The products address a gap between property insurance and business interruption protection. While a fire policy may compensate for damage to insured buildings, equipment or stock, it does not necessarily cover the income lost while a business remains closed.
Business interruption cover is generally linked to qualifying physical damage under an underlying property or fire policy. Consequently, a business may receive compensation for damaged stock but have no protection for lost sales if it has not purchased the relevant additional cover.
The scope of compensation also depends on policy limits, exclusions and the indemnity period, which determines the period for which eligible losses may be covered. Not every interruption or loss of income automatically qualifies for reimbursement.
Allianz Commercial recommended that businesses strengthen fire protection, identify critical suppliers and prepare recovery plans to limit disruption after an incident.
It also advised businesses to establish procedures for responding to cyber incidents and restoring essential operations.
For Nigerian businesses exposed to fire outbreaks and other operational disruptions, the availability of business interruption insurance provides an option for managing certain financial losses beyond physical damage. However, the extent of that protection depends on the cover purchased and the terms under which insurers agree to pay claims.
