4 ADJUSTINGTODAY.COM remains entitled to what the BI loss would have been for the projected “theoretical” period of interruption. Insurers agree. They frequently cite this same line of cases to support reducing a BI period by arguing that the policyholder failed to repair with “all due diligence and dispatch.” They assert that the BI period is an abstract time period that floats free from what actually happens. For example, this was the measure of the 2001World Trade Center loss, where a federal court allowed the insurers to define the BI period as the theoretical time period it “should” take to rebuild the complex, not necessarily how long it actually takes.10 This same line of cases applies in the instance of a sale and should prevent a reduction in the “theoretical” BI period that defines the scope of the seller’s BI recovery. Insurers cannot have it both ways — they cannot assert the “theoretical” BI period when it is shorter than the actual period (e.g., due to repair delays), but then ignore the “theoretical” BI period when it happens to be longer than the actual period (e.g., due to a sale). There are a few off-point cases in the assignment context that insurers sometimes cite, which address the very different issue of whether a purchaser who has been assigned a claim can thereby assert its own BI loss. For example, in Bronx Entertainment, LLC v. St. Paul’s Mercury Ins. Co., the insured, Family Golf, experienced losses from severe weather and filed an insurance claim. Family Golf thereafter sold its assets to Bronx Entertainment, and specifically assigned its insurance claim.11 The court correctly noted that the assignee received only those insurance rights that belonged to the assignor, and no more.12 The assignee, Bronx Entertainment, however, attempted to assert not only the pre-sale BI losses of Family Golf, but its own post-sale BI losses. The court ruled, of course, that Bronx Entertainment, as assignee, could not assert its own BI losses.13 In this regard, the court cited to and relied upon the superseded, earlier BA Properties ruling. Most importantly, the Bronx Entertainment court did not actually rule that the purchaser, as assignee, could not assert the rights of the seller/assignor, nor that the seller could not have held onto its own rights and made a claim for its own full BI losses, including beyond the sale date.14 Of course, calculating a theoretical BI loss beyond a sale date can be complex, given the absence of actual figures in the hands of the seller/policyholder, especially as to an extended BI period where the offset from actual sales may be unknown. The ultimate practical effect of a sale on the BI claim may be more a matter of proof, since the claim could become harder to track. Sellers that do not assign claims are advised to confirm the purchaser’s cooperation in supplying information to assist with the insurance claim. 2. Unrepaired Property To the extent that the Seller has already incurred repair or replacement costs, such costs are reimbursable under the policy. If there are certain permanent or other repairs estimated but yet to be made at the time of sale, those estimated costs remain recoverable notwithstanding the sale. There generally are four options for adjustment on the property side:
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