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BUSINESS INTERRUPTION INSURANCE (Business Interruption Coverage (Employee…
BUSINESS INTERRUPTION INSURANCE
covers the loss of income that a business suffers after a disaster
Purpose
Protect the insured against loss of income
Put the insured in the same financial position as if no loss had occurred
Scope of coverage
protect the prospective earnings of the insured business
Provides cover for the financial losses due to an interruption to a business caused by damage to property
Business Interruption Coverage
Employee wages – Make payroll
Taxes – Required tax
Relocation –Temporary location
Rent or lease payments – Continue payment
Revenue – Income earned during period
exclusion
Losses from partial closures
Losses from closures caused by non-covered damages
Income that isn't documented – Important to document.
Utilities –Typically stopped
Right of indemnity holder
All sum which he may have paid upon compromise of such sued
All cost which he may be compelled to pay
All damages which he may be compelled to pay in any sued
Factors to consider
Expected experience of the business after the loss
Actual experience of the business after the loss – Mitigation
Actual experience of the business before the loss
Reasonableness of repair period -“due diligence and dispatch”
period of indemnity is the length of time for which benefits are payable under an insurance policy.
claim
Rebuilding
Business Contents and Machiner
Rebuilding of Customer Base