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BUSINESS INTERRUPTION INSURANCE (INDEMNITY (Factors to consider (actual…
BUSINESS INTERRUPTION INSURANCE
DEFINITION
Policy that covers loss of income that business suffers after a disaster
Difference between Property Policy & Business Interruption Insurance
Property Policy (Fire)
cover physical damage
direct loss
Business Interruption (Fire Consequential Loss)
covers expenses cost
indirect loss
SCOPE OF COVER
Protect prospective earning
Coverage
revenue ( income earning during the period)
rent/ lease payment
relocation ( temporary location)
employee wages
taxes
Excluded
utilities
undocumented income
losses from partial closures caused by non-cover damage
INDEMNITY
2 Parties
Indemnity holder & indemnifier
all insurance contract are contract of indemnity except life insurance
measure indemnity
for building
consequential loss during the loss happen
Factors to consider
actual expenses before loss
expected expenses after loss
Definition: length of time for which benefits are payable under an insurance policy
maximum indemnity period under B.I.I
min: 3 month
max: 3 years
SUM INSURED
Understand clients needs & objective
underwriting consideration
type of policies & clauses
claim amount
not covered
rating factors
ASCERTAINMENT OF LIABILITY
Liability determined/ fixed/imposed under same contract, law & other such act
ASCERTAINED LIABILITY
not determined/ foxed & provision created for such anticipated liability then to be added in net profit
RATING FACTORS
premium calculated by apply rate to gross profit