Measuring Business Interruption Losses and Other Commercial Damages, An Economic Approach

Note that although "business interruption" can sometimes mean specifically those insurance claims under loss of business income and extra expense policy provisions, this book's title uses "business interruption" more broadly, as occurring anytime an event interferes with business performance and a claim or lawsuit ensues. Since he acknowledges that "with many decisions in business interruption loss analysis, the answer is dependent on the case" (p. 153), his aim is to present a systematic general framework for "methodological due diligence" (p. 144) that can be applied widely, and he succeeds.1 Even when his examples feature large enterprises, which they frequently do, the general analytical structure that he lays out can be applied to smaller firms. [...]to some other texts expounding lost profits analysis, such as Fannon and Dunitz (2020) and Harry and Kinrich (2017), Gaughan's book places more emphasis on theory and principles of economics and finance, and less on quantification mechanics. [...]rather than providing detailed instructions for decomposing corporate tax returns, or checklists for interviewing company management, this book steps back and stresses the importance of situating lost profits within an analysis of relevant macroeconomic and industry conditions. For those who already hold a copy of the second edition, this updated version may not be required, although for practitioners interested in the domains of intellectual property, securities law, antitrust, or punitive damages, the applicable chapters in the latest edition have an abundance of new content and additional references.