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BUSINESS INTERRUPTION INSURANCE (indemnity (Period Indemnity (maximum…
BUSINESS INTERRUPTION INSURANCE
Known as; business income insurance
policy to covers the loss of income that business suffers after a disaster.
Purpose
Protect insured against loss of income
Pay specific expenses covered in policy, payroll
indemnity (no profit gained)
Put no same financial state as no loss accured
Scopes of Cover
Protect Prospective earning
Quoted Peril
Employee Wages (payroll)
Taxes (required Tax)
Relocation (Temporary location)
Rent or lease Payment (continue Payment)
Revenue (Income earned during period)
Uninsured Peril
Can be requested to utilize company into policy
Income that is not documented (important to document)
Utilities
Losses from partial closures
indemnity
insurer compensated insured from losses in order to get insured party back on track
2 Parties
Insured (indemnity Holder)
Insurer (Indemnifies)
All insurance contract are contract of indemnity except life insurance and health policy
life no limit
no xhanges
Able to loss body
right of indemnity holder
measure indemnity
building
consequential cost @ loss occurred during the loss happen
3 Factor
Actual exp before loss (revenue occur)
Expected exp after loss
Actual experience of the business after the loss (mitigation)
Period Indemnity
length of time for which benefits are payable under an insurance policy.
Expected experience because have future value - can change due to inflation
maximum indemnity period
need to establish max period (12-26 month)- resulting specified peril
not included in this policy wrong (all these is direct loss)
typical maximum period indemnity
minimum 3 month
maximum 3 years
Renewal
insurer will have liability in respect of the claim until the period expired
Ascertainment of liability
Liability determined/fixed imposed under some contract, law & other such part
Sum insured
partial loss/total loss
Ascertained Liability
Not determined/fixed & provision created for such anticipated liability then to be added in net profit
Rating Factors
Premium calculated by apply rate to Gross profit
Loss
Indirect Loss
Extra Loss (Expenses)
Direct Loss
Right of Insured
Insurer send adjuster to look for loss incurred
Fatal/Theft make report