The maximum period over which a business interruption loss is paid after the event, the one parameter that decides whether the cover is useful at all.
The indemnity period is the span, running from the physical loss, over which business interruption cover meets the shortfall in margin. It is not the duration of the works but the duration of the return to normal: a plant rebuilt in eight months may take two years to recover its market share, and it is that second duration the cover must reach. It is the worst calibrated parameter in commercial policies, because it is chosen at inception on an intuition and cannot be corrected at the time of loss: too short a period truncates payment at exactly the moment the business needed carrying, with nothing in the contract flagging the shortfall. Its appropriate length turns on factors rarely examined: rebuilding lead time, availability of specific equipment, requalification procedures for a production site, seasonality of the sector. The problem solved is bounding a commitment that, without a time limit, would become a guarantee of the company's own results.
The fire of March 19, 2021 at the Renesas semiconductor plant in Naka, Japan, took about four months to return to nominal output, but the downstream loss suffered by carmakers ran well beyond that. A twelve month indemnity period would have covered the event end to end; a three month period would have cut it off at its most expensive point.
durée d'indemnisation en perte d'exploitation, période de garantie PE