Please enable JavaScript.
Coggle requires JavaScript to display documents.
Business Interruption Insurance (Working of Sum insured (based on what…
Business Interruption Insurance
Business Income Insurance
Covers the loss of income (business suffers after a disaster)
Covered may be due to disaster-related closing of the business facility or rebuilding process after a disaster.
Loss of profit faces by insured
Differences
Property Policy (Fire)
Cover Physical Damage (Equipment, machinery, etc)
Direct loss
Business Interruption (Fire Consequential Loss)
Cover Expenses Cost (Loss of income, revenue, taxes and etc.
Indirect Loss
Purpose of Business Interruption Insurance
Protect the insured against loss of income
Scope of Coverage
Earnings of the insured business
Provides cover for the financial losses (an interruption to a business caused by damage to property)
i. Direct Loss
ii. Indirect Loss (Exp; Rent)
iii. Extra Expenses
Business Interruption Coverage
Revenue (Income earned during period)
Rent or lease payments (continue payment)
Relocation (Temporary location)
Employee wages (make payroll)
Taxes (required tax)
Business Interruption Insurance Can't Cover
Utilities: Typically stopped (exp when machinery(damages) can't be used for business)
Income isn't documented: important to document
Loss from partial closures (exp, when the roof of coffee shop damages cause of wind storm)
Losses from closures caused by non-covered damages
Indemnity
Insured
Insurer
All insurance contracts're contract of indemnity except life insurance
Period of Indemnity
Length of time for (benefits're payable under an insurance policy)
Typical max Indemnity periods under business interruption insurance policies
6 month
12 month
18 month
24 month
Working of Sum insured (based on what client request)
Understand client's needs & objectives
Underwriting Considerations
Type of Policies and Clauses
Working of Claim AMOUNT
What is not covered
Rating factors
What is Insured?
Gross Profit ( Standing of charges & net profit)
Increase in cost of working